- Markets are under extreme pressure this morning as credit market dysfunction
deepens, central banks undertake major liquidity injection and investors await
the House vote on the Emergency Economic Stabilization Act (formerly TARP). Oil
is off more than $6 around $100 and other commodities are also down on global
economic concerns, although gold is higher on safe-haven buying. Overnight
governments in the UK,
Germany and Iceland
moved to rescue several major financial firms, including Fortis, Bradford &
Bingley, Hypo Real Estate and Glitnir Bank as the shockwaves from the US
financial crisis take out the European banking system's weakest links. European
borrowing costs rose to record levels after the government-led bailouts
heightened concern that there will be more trouble to come in Europe,
prompting financial institutions to hoard cash. The Fed, FDIC and Treasury
arranged the sale of Wachovia to Citigroup this morning. Morgan Stanley
released the concrete details of Mitsubishi UFJ's investment, noting that it
would pay $25.25 for an initial 9.9% stake, eventually raising that to 21% for
a total investment of $9B. MS is down more than 10%. Apple was cut at RBC and
Morgan Stanley overnight. Analyst Kathryn Huberty cut her AAPL price target 35%
and reduced the name to equal-weight, noting that slowing iPhone and Mac orders
should force the company to cut prices to compete this holiday season, weighing
on earnings. AAPL is down nearly 14% on the news, while fellow tech names GOOG,
RIMM, DELL and TXN have fallen 4-6% in line with Apple; QCOM is down 8%. The
Baltic dry bulk index fell sharply again today, the sixth consecutive decline
for the critical indicator of shipping rates. Ocean freight companies are down
sharply on the news, led by EXM-16% and EGLE-14%, with DRYS, DSX and GNK down
10%. The energy complex is weak as oil falls more than $6, with COP and BP down
more than 6% and CVX and XOM down around 4%. Mining stocks RTP, RIO and FCX are
down more than 10% on news that Chinese buyers of Indian iron ore are
defaulting on import contracts, while steel names down on cautious comments in
the WSJ, which reported overnight that US steel companies are facing a sharp
decline in demand as buyers become concerned about the credit crisis and global
slowdown. Inventories are rising and prices on some key products have fallen by
10%. CC-10% missed EPS and revenue estimates by broad margins this morning, and
withdrew its 2009 guidance. The firm's CEO noted that "Our sales were
below plan for the quarter, driven by a significant decline in traffic, which
we believe reflects the worsened macroeconomic environment, competitive
pressures and a weakened brand position." WAG-4% is under pressure despite
reporting mostly in-line with estimates.
- Events moved quickly at Wachovia over the weekend, with the government
finally stepping in to arrange the sale of the bank to Citigroup this morning.
Last night reports circulated that Citi and Wells Fargo were bidding to take
WB's banking operations, with the WSJ even saying that WFC was the preferred
buyer. This morning Citi was tapped to assume $42B of losses, senior and
subordinated debt, and a $312B pool of loans from Wachovia for $2.1B in total.
As part of the deal, Citi has granted the FDIC $12B in preferred stock and
warrants to compensate it for backing up certain losses from the bank. As a
result of the acquisition, Citi cut its dividend in half. This FDIC's Bair said
the decision was made under extraordinary circumstances with significant
consultation among the regulators and Treasury, and was necessary to maintain
confidence in the banking industry given current financial market conditions.
Treasury Secretary Paulson noted that Wachovia's failure would have posed a
systemic risk, while the sale has prevented a market disruption. Oppenheimer
analyst Meredith Whitney told CNBC that she believes she would be a seller of
Citigroup following the deal, noting that Citi would need to raise as much as
- Stress in the credit system remains extremely elevated both here and overseas
as money flows to the relative safety on shorter-dated Treasuries. The curve is
steeper with the US
two-year yield falling to 1.85%. The US
three-month TED spread traded briefly traded above 350 basis points for the
first time. Talk that credit default swaps for certain countries were widening
out noticeably added to the jitters.
- In currencies the global liquidity crisis remained the dominant theme, with
USD, JPY and CHF seeing significant moves in a trading session defined by
heightened stress, thanks to the European bailouts, US
development central bank liquidity operations. The EUR/JPY cross was off 350
pips as it probed towards the 151 handle while GBP/JPY fell over five big
figures to test 189.50 during the New York morning. The EUR/USD traded as low
as 1.4305 before retracing toward the mid 144 area. Safe-haven flows headed to
the shorter end of the yield curve in both Europe and
the Satets. The Fed said it would take a series of steps to help global central
banks to increase dollar funding in their home markets, noting that
dollar-funding rates abroad "have been elevated relative to dollar funding
rates available in the United States," reflecting "a structural
dollar funding shortfall" outside of the US. The Fed increased the size of
the 84-dayTAF auctions to $75B per auction from the current level of $25B and
proceeded to raise swap lines foreign central banks to $620B versus $290B
prior. Note that several European central banks added to upside momentum in
gold after curbing futures sales of the yellow metal. Germany's
Bundesbank said it would halt gold sales this year under its existing central
bank agreement while the SNB noted that no more sales are planned at this time after
reducing its amount held to 1,040 tons.
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Mon 19 Feb 2018
00:00 CN, US- Holiday Tue 20 Feb 2018
00:00 CN- Holiday A 10:00 US- ZEW Survey Wed 21 Feb 2018
00:00 CN- Holiday A All Day flash PMIs A 15:00 US- Existing Homes Sales A 15:30 US- EIA Crude AA 19:00 US- Fed Meeting Minutes Thu 22 Feb 2018 A 09:00 DE- IFO Survey A 09:30 GB- GDP AA 13:30 CA- Retail Sales A 13:30 US- Weekly Jobless Fri 23 Feb 2018 A 10:00 EZ- Final HICP AA 13:30 CA- CPI
John M. Bland, MBA co-founding Partner, Global-View.com
Veteran FX Trader, Max McKegg, forecasts all the Major currencies and the Australasians; providing Daily and Medium Term Trading forecasts to subscribers, who include large Banks the world over, as well as individual traders in more than 30 different countries.
looking for your first broker or do you need of a new one? There are
more critical things to consider than you might have thought.
We were trading long before there were online brokers. Global-View
has been directly involved with the industry since its infancy. We've
seen everything and are up-to-data with recent regulatory changes.
The Global-View Forex Forum is the hub for currency trading on the web. Founded in 1996, it was the original forex forum and is still the place where forex traders around the globe come 24/7 looking for currency trading ideas, breaking forex news, fx trading rumors, fx flows and more. This is where you can find a full suite of forex trading tools, including a complete fx database, forex chart points, live currency rates, and live fx charts. In addition, there is a forex brokers directory where you can compare forex brokers. There is also a forex brokers hotline where you can ask for help choosing a forex broker that meets your individual fx trading needs. Interact on the same venue to discuss forex trading.
The forex forum is where traders come to discuss the forex market. It is one of the few places where forex traders of all levels of experience, from novice to professionals, interact on the same venue to discuss forex trading. There is also the GVI Forex, which is a private subscription service where professional and experienced currency traders meet in a private forex forum. it is like a virtual forex trading room. This is open to forex traders of all levels of experience to view but only experienced currency tradingprofessionals can post.
Currency trading charts are updated daily using the forex trading ranges posted in the Global-View forex database. You will also find technical indicators on the fx trading charts, e.g. moving averages for currencies such as the EURUSD. This is another forex trading tool provided by Global-View.com.
The forex database can be used to access high, low, close daily forex ranges for key currency pairs, such as the EURUSD, USDJPY, USDCHF, GBPUSD, USDCAD, AUD, NZD and major crosses, including EURJPY, EURGBP, EURCHF, GBPJPY, GBPCHF and CHFJPY. Data for these currency trading pairs dating back to January 1, 1999 can be downloaded to an Excel spreadsheet.
Forex chart points are in a currency trading table that includes; latest fx tradinghigh-low-close range, Bollinger Bands, Fibonacci retracement levels, daily forex pivot points support and resistance levels, average daily forex range, MACD for the different currency trading pairs. You can look on the forex forum for updates when one of the fx trading tools is updated.
Global-View also offers a full fx trading chart gallery that includes fx pairs, such as the EURUSD, commodities, stocks and bonds. In a fx trading world where markets are integrated, the chart gallery is a valuable trading tool. Look for updates on the Forex Forum when the chart gallery is updated.
Global-View.com also offers a forex blog, where articles of interest for currency trading are posted throughout the day. The forex blog articles come from outside sources, including forex brokers research as well as from the professionals at Global-View.com. This forex blog includes the Daily Forex View, Market Chatter and technical forex blog updates. In additional to its real time forex forum, there are also Member Forums available for more in depth forex trading discussions.
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