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Tuesday December 4, 2007 - 13:59:26 GMT
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Credit market worries made investors to reduce riskier exposures
Credit market worries made investors to reduce riskier exposures
News and Events:
The Yen rose broadly in quiet trade on Monday as continued uncertainty over the fallout from the US credit market turmoil caused investors to reduce exposure to risky carry trades. US stocks fell on concerns about the impact of the housing slump, boosting the Japanese currency. Investors tend to price risk perception through equity markets and there is a negative correlation between stocks and the Yen. The latest credit casualties outside the United States include four Norwegian municipalities hit by losses on US investments and German state-backed regional lender WestLB, which will see a loss of up to â‚¬ 1 billion this year. Yesterday, UsdJpy was down 0.72% at 110.43, having touched to a session low of 110.13. End last week, UsdJpy rose up to 111.23, its highest level since mid-November. EurJpy traded down 0.5% at 161.97, while UsdChf dipped 0.17% to 1.1273. AudUsd fell 0.42% to 0.8807. FX traders also pointed to a report by Moody's Investors Service on Friday that it may be preparing a series of credit-rating cuts related to sub-prime mortgages that may impact over $100 billion worth of securities. The Dollar briefly pared losses against the Yen after US Treasury Secretary Henry Paulson said the government is close to brokering a comprehensive mortgage aid plan that will shepherd many troubled sub-prime borrowers into safe and sustainable loans. EurUsd rose 0.23% to 1.4667 recovering some ground after posting its biggest weekly percentage fall in more than three months. The expected rate cuts boosted confidence that the Fed would keep the US economy from recession, igniting gains in stock markets and briefly shifting market focus from a narrowing yield advantage. Investors didnâ€™t want to take bigger risks before euro zone and British interest rate decisions this week and a closely watched US jobs report that may help determine the extent of US monetary policy easing next week and in the New Year. The European Central Bank is expected to hold its key rate at 4 percent on Thursday.
Today's Key Issues (time in GMT):
10:00 EUR October Euro zone Producer Prices 0.4% vs 0.4% (MoM)
10:00 EUR October Euro zone Producer Prices 3.1% vs 2.7% (YoY)
14:00 CAD Bank of Canada Rate decision 4.5% vs 4.5%
22:00 USD ABC/Wash Post Index -22 vs -21
22:30 AUD December RBA cash rate 6.75% vs 6.75%
The Risk Today:
EurUsd Euro is searching for direction after having pull back from last Friday 23rd November record high 1.4967. It might return down to two weeks ago support on 1.4520. On the downside, only a return below 1.4500 and further drop to 1.4280 former resistance would threaten the last 3 months uptrend. This could open the way down toward 1.4000 nearby support and 1.4125 trendline support. Initial resistance holds 1.4723 former support.
GbpUsd Cable found support last week around 2.0600. On the upside, 2.0833 Nov 28th high marks the strong resistance before putting 2.1161 trend high and 2.1355 May 11th 1981 into focus. Initial resistance holds 2.0700 Friday high. On the downside, a sharp return below 2.0525 may open a market reversal. But it would need renewed pressure below 2.0200 and further weakness toward 2.0000 psychological levels to validate a downtrend. Initial support holds 2.0525.
UsdJpy Downtrend might have end early last week. even with last three days pullback. Last Friday break up 110 level will put 114 into focus. This may open the way toward 117.63 resistance. On the downtrend, supports hold 106.50 June 2005 low and 101.68 January 2005 low. Initial support holds 110 minor. Initial resistance holds 111.23 Friday high.
UsdChf Downtrend remains heavy, even with last week 4 positive sessions started on 1.0888 23rd November low. Market had found support on 1.1000 key level and posted a fourth consecutive positive session. Initial resistance holds 1.1300 (12th Nov) high. It would also need a return over 1.1500 and 1.1640 level to relieve actual bear threat.
Resistance and Support:
|S: Strong, M: Minor, T: Trendline, K: Keylevel, P: Pivot|
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Amazing Trader EVENT RISK Calendar:
Tue 12 Dec
09:30 GB- CPI
10:00 GB- ZEW Survey
13:30 US- PPI
Wed 13 Dec
00:30 AU- Employment
09:30 GB- Unemployment
13:30 US- CPI
15:30 US- EIA Crude
19:00 US- Fed Decision
Thu 14 Dec
07:30 CH- SNB Decision
All Day- Global- flash PMIs
12:00 GB- Bank of England Decision
12:45 EZ- ECB Decision
13:30 US- Retail Sales
13:30 US- Weekly Jobless
14:45 US- Industrial Production
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John M. Bland, MBA
- POTENTIAL PRICE RISK: Mediun Tue--10:00 GMT-- DE- ZEW. Second Tier Sentiment Survey
- POTENTIAL PRICE RISK: HIGH-Medium Tue--13:30 GMT-- US- PPI
- POTENTIAL PRICE RISK: HIGH-Medium Wed--09:30 GMT-- GB- Employment
- POTENTIAL PRICE RISK: HIGH Wed--13:30 GMT-- US- CPI
- POTENTIAL PRICE RISK: Medium Wed--15:30 GMT-- US- EIA Crude
- POTENTIAL PRICE RISK: High Wed--19:00 GMT-- US- Fed Decision
- POTENTIAL PRICE RISK: HIGH- Thu --00:30 GMT-- AU- Employment
- POTENTIAL PRICE RISK: Medium- Thu --All day-- global- flash PMIs
- POTENTIAL PRICE RISK: HIGH-Medium- Thu --07:30-- CH- Swiss National Bank Decision
- POTENTIAL PRICE RISK: HIGH-Medium- Thu --09:30-- GB- Retail Sales
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