About a month ago, referring to the considerable risks for the dollar on FOREX
About a month ago, referring to the considerable risks for the dollar on FOREX, we have said, first, that FedRezerv meeting at 18 \ 03 can go to reducing the federal funds rate by another 50 basis points. Approximately one week or one and a half ago, it has gone that could make the Fed softening of monetary policy immediately by 75 basis points, the market is now much speculation on the fact that the Central Bank and the United States could do to reduce the interest rate in March by 1%. Naturally, the dollar under such mood in FOREX had no choice but to pursue a buyout.
Incidentally, with regard to the reasons for such a high probability of further mitigate the growth of monetary policy in the United States, in addition to anything else you want to draw attention to the stock market and the United States, where the major stock indices (S & P500, Dow-Jones, Nasdaq Composite) to renew its close January minima.
Given that the overwhelming majority of American citizens invests its assets in real estate or stocks, it is legitimate that FedRezerv will prevent a vast drop in the national sites. Regarding the employment report Friday from the world's largest economy, it seems to me the negative and neutral-not so much frightening as we try to provide many economists and analysts. At least this indicates that the unemployment rate (Unemployment rate) in the region in February fell to 4.8%, which is quite compensate for the negative Nonfarm payrolls at 63k. The situation will change if the monthly decline in employment during the quarter will be in the order 100k, and jobless claims while closely fit to 400k.
Expected interest rates for 2008 (blue line at 27, 02, red at 07 \ 03)
Still on the subject of interest rates, should also be noted that while all the same speculators for the most part expect reduce rates 18, 03 at 0.75%, and rumours of -1% somewhat exaggerated. If the Fed does decide to bid immediately cut by 1%, the first dollar it can to cause to fall on FOREX, but then speculators may well begin to play that by the next meeting of the Central Bank will take a pause and cease to lower rates, which ultimately could positively impact on the American currency. Another option would be to what is now selling the dollar, and to reduce fakut at 0.75%, in contrast, will begin to repurchase fixing profit.
To some extent the situation in a possible Fed decision next week, as well as the attitude of investors to risk (Carry trade - JPY, CHF) can clarify the March 13 publication of retail sales (Retail sales) for February (0,1% forecast, previous value 0.3%). It is safe to assume that some currency market participants will be given for the negative statistics for the dollar, so the eve of its withdrawal would try to play a demotion to the American currency.
Translating everything for a couple of EUR, USD, in this regard can not be ruled out that course at the beginning of the week will try to approach or update Friday maximums. I would, however, in this case from new purchases declined, given the fact that many of target levels for the euro in record-short time have been achieved that, coupled with perekuplennostyu EUR-USD may lead to the fixation of profits and reduce correctional course. As a key rezistansa on euro-dollar at this level, there are now 1.54, 1.55. Regarding the possible sale of the euro, it is advised to keep in mind, I would not only stop on the warrant, but also about the fact that the trend against the often fraught with negative mat. waiting or more simply put, negative result.
Fundamentally because buyers and sellers in EUR, USD, in my opinion, can be assessed on Tuesday, when Germany will ZEW economic expectations index (ZEW Economic Expectations Index) for March (previous value -39,5). For GBP, USD considerable attention on Monday is to give data on inflation, which fell in the UK day. Height above 2.02 could marked achievement rezistansa 2.04.
Individual attention in the forthcoming% decline in rates in the United States should pay carry trade. Personally, I proceed from the fact that the decline in the federal funds rate at 0.75% -1% can be no cause for the rise of world equity markets that would weaken, in turn, kratkosrochke position in the yen and the franc on FOREX, allowing play to promotions XXX, XXX and JPY, CHF.
In the meantime, it is possible that the USD-JPY will try once again to test 101.50 support, or even try to poydoyti cherished level of 100. A positive development for the Asian currencies should, in the view of analysts who believe that, in last Friday Japanese Finance Minister Fukushiro Nugaka not given any attention Harmful growth rate for exporters yen, noting only that the Government should closely monitor changes in exchange rates . It should be noted that, beginning in 1995, any reduction pair USD, JPY to 100 verbal accompanied by the first, and then the real currency intervention. On the other hand, the problems of the Japanese economy, sooner or later, may be forced to resort to the old Central tools to stimulate economic growth. Overall, we shall follow the news background.
Thursday, March 13, 2008
Review American and Asian session 10.03.2008
Review American and Asian session 10.03.2008
Data on the job market in the United States were mixed.
On Friday session at the American dollar rose against the backdrop of the labour market in the United States.
Economists forecast the number of jobs created outside of agricultural wallpapers in February should range from 0 to +25000. Given ADP data presented on Wednesday, which showed a reduction of jobs in the private sector to 23000, market participants expect the weak official data, despite forecasts of economists. As noted above figures actually responded to the expectations of the market, which allowed the euro rate rise to a new maximum of 1.5463. However, the sudden decline in unemployment has made adjustments to the dynamics of the course.
According to the Ministry of Labor Statistics the number of new jobs can only dream of agricultural again in February fell by 63000, the January figure was revised for the worse before -22 000. At the same time, the unemployment rate unexpectedly fell to 4.8%, while economists predicted growth of up to 5%. Ambiguous data led to the fixation of short positions on the dollar, which has supported the dollar rate.
Although data on the labour market in the United States have fallen short of forecasts of economists, the new week dollar may continue to decline again, as well as the reduction of jobs in the United States indicates a worsening of the American economy. According to economists, "the reduction of unemployment was not due to an increase in employment, a reduction in the workforce at 450000 people" - reported in the Dow Jones, that is a negative point.
At the Asian session rates of the major currencies traded in limited ranges. At the time of this writing, Pope euro / dollar CIOC at 1.5375. Pound against the dollar negotiate with the level of 2.0175. Para dollar / CIOC franc at around 1.0205. Para dollar / yen level from 102.00 CIOC.
Today at the European session, the main events will be data on industrial production and manufacturing industries in the manufacturing sector for January in the United Kingdom, as well as data on producer prices in February. The data will be presented at 12:30 Moscow time. Pound may be supported after the publication of the UK.
Data on the job market in the United States were mixed.
On Friday session at the American dollar rose against the backdrop of the labour market in the United States.
Economists forecast the number of jobs created outside of agricultural wallpapers in February should range from 0 to +25000. Given ADP data presented on Wednesday, which showed a reduction of jobs in the private sector to 23000, market participants expect the weak official data, despite forecasts of economists. As noted above figures actually responded to the expectations of the market, which allowed the euro rate rise to a new maximum of 1.5463. However, the sudden decline in unemployment has made adjustments to the dynamics of the course.
According to the Ministry of Labor Statistics the number of new jobs can only dream of agricultural again in February fell by 63000, the January figure was revised for the worse before -22 000. At the same time, the unemployment rate unexpectedly fell to 4.8%, while economists predicted growth of up to 5%. Ambiguous data led to the fixation of short positions on the dollar, which has supported the dollar rate.
Although data on the labour market in the United States have fallen short of forecasts of economists, the new week dollar may continue to decline again, as well as the reduction of jobs in the United States indicates a worsening of the American economy. According to economists, "the reduction of unemployment was not due to an increase in employment, a reduction in the workforce at 450000 people" - reported in the Dow Jones, that is a negative point.
At the Asian session rates of the major currencies traded in limited ranges. At the time of this writing, Pope euro / dollar CIOC at 1.5375. Pound against the dollar negotiate with the level of 2.0175. Para dollar / CIOC franc at around 1.0205. Para dollar / yen level from 102.00 CIOC.
Today at the European session, the main events will be data on industrial production and manufacturing industries in the manufacturing sector for January in the United Kingdom, as well as data on producer prices in February. The data will be presented at 12:30 Moscow time. Pound may be supported after the publication of the UK.
Bank of Japan
The saga continues with those who have become the head of the Bank of Japan ...
The saga continues with those who have become the head of the Bank of Japan. The most probable candidacy in the matter, Toshiro Muto, said on Tuesday that he intends to defend this post independence of the Central Bank in making all decisions on what should be the monetary policy (in the past can hardly believe that). This issue can finally be closed (Muto is approved or not) for 14 or 18 March. I, like, have to go into more detail of the issues, there will be another chapter in the future BOJ intervention on currency or decline, rising interest rates, but, in my view, a decisive influence on the position of yen in FOREX now can provide, especially , the attitude of investors to risk or to carry trade, and what will stop in more detail.
It remains the best indicators of investors' attitudes to risk should consider the current momentum of world stock markets, as well as yield Treasuries. In the first case it is sufficient to draw attention to yesterday's closure of the U.S. stock market, where indexes lost more than one per cent (Dow-Jones -1.29%, S & P500 -1.55% -1.95% Nasdaq Composite) to understand that " "bull trend on the yen is not accidental. Based on the working hypothesis that the S & P500 has a strong chance to decline until 1230 or even 1190, 1200, I would be morally prepared for the fact that a pair of USD-JPY may well try protknut familiar, we support 101.50, 60, went to 100. However, a certain idea is to try to play to increase the USD, JPY from current price levels, it should be recognized all the same there.
Again, in a working idea, I would have remembered that the next possible rate reduction in the United States at 0.75%, 1% within the next Fed meeting or extraordinary support could greatly world market shares, causing them to rise 1-2 days, which, in turn, would ease for a few trading sessions position yen or franc. No less positive for Equities, however, can also be a good statistics from the United States this week, if it is. This largely relates to data on retail sales in the United States on Thursday. Given favorable scenario of events the USD, JPY could recover up to 105.
June futures on the price of ten-year treasury bonds (daily chart).
Add that on Tuesday morning, we see some attempt futures on the American stock indices, with the result that at the same FOREX cross-rates AUD, NZD and JPY \ JPY skorrektirovatsya trying to lower on Monday. In doing so, the Australian currency looks at the beginning of this week somewhat worse than New Zealand, which may be due to the fact that the index of business sentiment in Australia from National Australia Bank in February went below zero again, reaching -2 item, which shows pessimistic mood among business people.
Certain negative for AUD may also be tense situation at the national credit market, vyrazivshayasya in lending rates before takeoff maximum values from the mid 90 - ies. If a daily infusion of money into the market through repo operations of the Central Bank of Australia nuzhnoo not bring results, and to the same situation on foreign markets will continue to deteriorate, it may well be time to go talk about downside risks to the Australian economy and falling interest rates in the region. In the meantime, note that in AUD, USD within the framework of a long-term rising trend has some foundation in the area of support skorrektirovatsya 0.89, 0.90 in March and April.
But one of these indicators should carry trade take on commodity price market. Until very clearly see the outflow of money from stock investor in commodities, which ultimately will, and it became one of the main reasons for the take-off in oil prices prior to $ 108 a barrel. It is not ruled out that "bull" trend in commodities will continue at least several more months, given that, firstly, we have not seen any signs of a turn for the U.S. stock market, and, secondly, Due to the fact that the subject of write-offs, "sabpraym" still scares investors. Barclays Recent studies indicate that 34% of the 260 institutional investors polled consider it appropriate in the next three years, about 10% of its assets placed in raw materials. Another indicator of this kind of sentiment can be further inflow of funds at the site where treated commodity futures.
As a conclusion, it can be assumed that began in spring will have to play at least in kratkosrochke at improving on raw materials. Here, it is true, too, much is about what it would be Fed monetary policy. First, I would immediately made an amendment to the fact that commodities are now actively buy under the imminent decline% rate, so by the fact the decline could start fixing some profits in raw materials, and, secondly, would monitor the situation in China, where inflation at 11 - a maximum of summer could mean further tightening of monetary policy in the region, as a result, higher interest rates and eventually to some correction in commodities. Also, I would have tried to refrain from positions on the sale of gold and oil, given that there, and there is this game will go on lowering counter to the prevailing trend.
Regarding the FOREX Market, the take-off in commodity prices may mean the following:
expensive oil will facilitate the continuation of the rising trend in EUR, USD, as the ECB will continue through the growing rate of the national currency to prevent a possible strengthening of inflationary pressures in the region;
commodity currencies (AUD, NZD, CAD) can get with the times even more "fed" on the part of commodity platforms, especially in the long term could manifest itself in the currency pairs, where there is a AUD and NZD;
Bank of Japan may accept a further strengthening yen rate, that is, with an even greater decline in the cross rates XXX, JPY, because only in this way can be purchase for the national economy and, in particular, to manufacturers of raw materials and household inflation and gasoline;
in the long period of expensive raw materials will mean even greater increase in inflation in some economies the world, which ultimately may mean already increasing, rather than reducing interest rates in the United States in 2009.
With regard to upcoming auctions in London and Frankfurt, the cross-rate EUR-CHF can continue to grow, recover to a decline on Monday when a) statistics from Germany (ZEW Economic Expectations Index) at 13:00 Moscow time would be better expectations for March ( Forecast -40, previous value -39,5) b) European stock indices, as well as futures on indexes stabilized USA at the upcoming European trading session and would not fall. Good statistics in Europe might lead to the purchase and in a pair of EUR-USD.
The saga continues with those who have become the head of the Bank of Japan. The most probable candidacy in the matter, Toshiro Muto, said on Tuesday that he intends to defend this post independence of the Central Bank in making all decisions on what should be the monetary policy (in the past can hardly believe that). This issue can finally be closed (Muto is approved or not) for 14 or 18 March. I, like, have to go into more detail of the issues, there will be another chapter in the future BOJ intervention on currency or decline, rising interest rates, but, in my view, a decisive influence on the position of yen in FOREX now can provide, especially , the attitude of investors to risk or to carry trade, and what will stop in more detail.
It remains the best indicators of investors' attitudes to risk should consider the current momentum of world stock markets, as well as yield Treasuries. In the first case it is sufficient to draw attention to yesterday's closure of the U.S. stock market, where indexes lost more than one per cent (Dow-Jones -1.29%, S & P500 -1.55% -1.95% Nasdaq Composite) to understand that " "bull trend on the yen is not accidental. Based on the working hypothesis that the S & P500 has a strong chance to decline until 1230 or even 1190, 1200, I would be morally prepared for the fact that a pair of USD-JPY may well try protknut familiar, we support 101.50, 60, went to 100. However, a certain idea is to try to play to increase the USD, JPY from current price levels, it should be recognized all the same there.
Again, in a working idea, I would have remembered that the next possible rate reduction in the United States at 0.75%, 1% within the next Fed meeting or extraordinary support could greatly world market shares, causing them to rise 1-2 days, which, in turn, would ease for a few trading sessions position yen or franc. No less positive for Equities, however, can also be a good statistics from the United States this week, if it is. This largely relates to data on retail sales in the United States on Thursday. Given favorable scenario of events the USD, JPY could recover up to 105.
June futures on the price of ten-year treasury bonds (daily chart).
Add that on Tuesday morning, we see some attempt futures on the American stock indices, with the result that at the same FOREX cross-rates AUD, NZD and JPY \ JPY skorrektirovatsya trying to lower on Monday. In doing so, the Australian currency looks at the beginning of this week somewhat worse than New Zealand, which may be due to the fact that the index of business sentiment in Australia from National Australia Bank in February went below zero again, reaching -2 item, which shows pessimistic mood among business people.
Certain negative for AUD may also be tense situation at the national credit market, vyrazivshayasya in lending rates before takeoff maximum values from the mid 90 - ies. If a daily infusion of money into the market through repo operations of the Central Bank of Australia nuzhnoo not bring results, and to the same situation on foreign markets will continue to deteriorate, it may well be time to go talk about downside risks to the Australian economy and falling interest rates in the region. In the meantime, note that in AUD, USD within the framework of a long-term rising trend has some foundation in the area of support skorrektirovatsya 0.89, 0.90 in March and April.
But one of these indicators should carry trade take on commodity price market. Until very clearly see the outflow of money from stock investor in commodities, which ultimately will, and it became one of the main reasons for the take-off in oil prices prior to $ 108 a barrel. It is not ruled out that "bull" trend in commodities will continue at least several more months, given that, firstly, we have not seen any signs of a turn for the U.S. stock market, and, secondly, Due to the fact that the subject of write-offs, "sabpraym" still scares investors. Barclays Recent studies indicate that 34% of the 260 institutional investors polled consider it appropriate in the next three years, about 10% of its assets placed in raw materials. Another indicator of this kind of sentiment can be further inflow of funds at the site where treated commodity futures.
As a conclusion, it can be assumed that began in spring will have to play at least in kratkosrochke at improving on raw materials. Here, it is true, too, much is about what it would be Fed monetary policy. First, I would immediately made an amendment to the fact that commodities are now actively buy under the imminent decline% rate, so by the fact the decline could start fixing some profits in raw materials, and, secondly, would monitor the situation in China, where inflation at 11 - a maximum of summer could mean further tightening of monetary policy in the region, as a result, higher interest rates and eventually to some correction in commodities. Also, I would have tried to refrain from positions on the sale of gold and oil, given that there, and there is this game will go on lowering counter to the prevailing trend.
Regarding the FOREX Market, the take-off in commodity prices may mean the following:
expensive oil will facilitate the continuation of the rising trend in EUR, USD, as the ECB will continue through the growing rate of the national currency to prevent a possible strengthening of inflationary pressures in the region;
commodity currencies (AUD, NZD, CAD) can get with the times even more "fed" on the part of commodity platforms, especially in the long term could manifest itself in the currency pairs, where there is a AUD and NZD;
Bank of Japan may accept a further strengthening yen rate, that is, with an even greater decline in the cross rates XXX, JPY, because only in this way can be purchase for the national economy and, in particular, to manufacturers of raw materials and household inflation and gasoline;
in the long period of expensive raw materials will mean even greater increase in inflation in some economies the world, which ultimately may mean already increasing, rather than reducing interest rates in the United States in 2009.
With regard to upcoming auctions in London and Frankfurt, the cross-rate EUR-CHF can continue to grow, recover to a decline on Monday when a) statistics from Germany (ZEW Economic Expectations Index) at 13:00 Moscow time would be better expectations for March ( Forecast -40, previous value -39,5) b) European stock indices, as well as futures on indexes stabilized USA at the upcoming European trading session and would not fall. Good statistics in Europe might lead to the purchase and in a pair of EUR-USD.
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