Wednesday December 15, 2004 - 10:59:03 GMT
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FOREX: US OPEN MARKET POINTS 12-15-04
Will TICS Make it Three?
Yesterday we wrote “the price action indicates that the market is setting up for a dollar bearish surprise, with euro bulls looking for a one-two knock out punch of wider Trade Balance gap and narrower TIC data surplus. “ With Trade Balance widening to record –$55.5 Billion several analysts now project that TICS data could decrease to $56 Billion from last month’s $63 Billion figure. If that estimate is accurate it would leave practically no room for error between the ever widening Trade deficit and the disturbingly declining TICS surplus.
Certainly the dollar bulls received very little help from yesterday’s limp FOMC statement which kept the word “measured” in it’s language, telegraphing to the market that the Fed monetary policy will continue to err on the side of cautious accommodation. In all fairness to the Fed, given November’s lackluster NFP report, a more aggressive move yesterday could have sent the stock market and US consumer confidence into a tailspin right in the middle of the crucial Christmas shopping season which is responsible for as much as 40% of annual trade for some retailers. Nevertheless, with little reason to buy dollars after yesterday’s disappointing news-flow, euro longs have bullied the market higher taking the pair above the 1.3330 level.
We continue to believe that the pair will trade in 1.31-1.35 box for the rest of the calendar year, as more and more traders will begin to close out their books, so today’s TICS data even if it is dollar bearish will most likely only be able to push the EUR/USD to the upper end of that range
FX Spot Overnight
- EUR blasts through 3350 on anticipation of poor TICS data
- JPY targets 104 on dollar weakness not so bad TANKAN
- GBP takes 9350 as employment data delights sterling bulls
- CHF dives through 1500 on dollar weakness
- 13:30GMT – (8:30 AM EST) USD Empire Manufacturing (Dec) Expected 20.10, Previous 19.76
- 14:00GMT – (9:00 AM EST) USD TIC Data Net Foreign Purchases (Oct) Expected ---, Previous $63.4B
- 15:30GMT – (10:30 AM EST GBP Leading Indicator Index m/m F (Oct) Expected 0.3%, Previous –0.6%
- 15:30GMT – (10:30 AM EST) GBP Coincident Indicator m/m F (Oct) Expected 0.2%, Previous 0.7%
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