â€˘ UK consumer confidence rises to highest since Jan 2008
â€˘ Can equities close the week on a high?
Opening levels ()
ÂŁ/$: 1.6551, â‚¬/$: 1.4830, $/Y: 91.03
UK 5y sw: 3.28%, US 5y sw: 2.75%, EU 5y sw: 2.83%
- UK Oct consumer confidence rises to -13, strongest since Jan 2008
- German Sep retail sales unexpectedly fall 0.5% in September
- US 7y note auction tails 2bps, b/c 2.65; indirects take 59.3%
Better than expected and a broadly (government sponsored) based rebound in US Q3 GDP data were greeted with a relief rally in risk assets, but we are reserving judgement on the sustainability of the bounce or whether this is an opportunity to sell. We have pointed out how the early data points for October have disappointed and testify to a more somber mood among US households, risking deflating output in Q4. With that and unchanged Fed fund futures in mind, we are torn between profit taking and backing further gains in equities and pro-risk currencies (curve flatteners in bonds). We pin our hopes on next weekâ€™s blockbuster calendar to lift the fog. In the meantime, we are going along with the trend and favour a bounce in the S&P-500 up to 1,075 area following the bounce off trend line support (1043).
Ahead today: the Chicago PMI will offer a first read on October manufacturing activity. The PMI fell surprisingly back below 50 last month and is forecast to have edged back up to 48.5. Personal income spending data for October is expected to be weak. The flash October CPI estimate for the EU-16 is expected to show a rise to -0.1% y/y from -0.3%.
FX: The bounce in AUD and NZD cannot be ignored ahead of the RBA next week and thebullish set-up for equities favours further upside in AUD/USD and NZD/USD. For AUD/USD, a move over 0.92 puts the pair on target for 0.9250. For GBP/AUD, we target adecline back towards the 1.7875 area as AU/UK 2y spreads approach the high at 369bps.
For EUR/GBP, the EU/UK 2y spread looks set to finish the week where it started at 45bps. We look for positive correlation to resume next week. Key support runs at 0.8900. Rates: UK 5y swaps bounced sharply yesterday on better paying interest and opened a shade lower this morning at 3.277%. Resistance comes in around 3.31%, followed by 3.36%. Month-end buying should cap upside in longer duration yields though the end to the Fedâ€™s buyback programme will be a test for the US curve. For US 10y, follow-through buying in stocks could push yields back up towards last weekâ€™s 3.58% high.
Paul Rodriguez, Senior Technical Analyst
â€˘ A short covering bounce in equities yesterday was expected, the extent and aggressiveness of the rally was not. Despite this, I remain broadly bearish on the equity markets, but look to pick sell levels strategically until the bullish sentiment subsides. Bullish sentiment leaped yesterday, but I canâ€™t help feeling that this has come towards the end of an extended equity run - implying a reversal of trend. Pro-risk has won the battle, but not the war and in fairness many markets are simply back at Wednesdayâ€™s trading levels rather than zooming off into the stratosphere. To reiterate yesterdayâ€™s comments, a bumpy ride is par for the course when sentiment in a market changes, but I continue to look for evidence of a developing downward trend, with S&P target initially at 1,019. If we break back over the 1,100 high, I will be proved wrong, but for now, the safest play looks to be buying volatility. DAX index futures target 5,442 key support - a break completes a key top.
â€˘ The FX market rushed into the arms of risk yesterday, but I still believe this is misplaced. The bounce in EM and commodity currencies simply gave another chance to buy dollars and sell these risk related currencies. From a risk/reward perspective, stops have been hit as per the table below - yesterday was not a comfortable day for my view. The market picture could look very different by early next week and, indeed, by the end of the day as I believe the market is now vulnerable to bad news. We could therefore see a dramatic reversal of the NZD, AUD and CAD rebound, together with EUR and CHF weakness â€“ basically a reversal of risk. EM currencies have come back, but again, I am not convinced and see longer term opportunities aside from the short term volatility. Sterling remains a buy, but mainly against the EUR and CHF (although it should perform well against the EM /commodity currencies and grind higher against the dollar). This should also put a bid under government bonds and see yields edge lower.
Quantitative Market Analysis
Naeem Wahid, Quantitative Strategist
The Japanese PMI survey, released overnight, has remained firm at 54.3 marking the fourth consecutive month of expansion in the manufacturing sector. The jobless rate fell further to 5.3%, having peaked at 5.7% in July. Whilst the Tokyo CPI was slightly disappointing, the firm PMI (following the rise in the flash EZ PMIs reported last week) should continue to provide some upside risk for equity markets, given leading indicators have, so far, held up in this latest round.
GfK consumer confidence, released overnight in the UK, was also reported better than market expectations. The series rose to -13, itâ€™s highest since January 2008.
The data focus today lies around the US Chicago PMI and the final University of Michigan consumer confidence report. Whilst the Chicago PMI has generally been undershooting the ISM, the end of the cash-for-clunkers programme leaves the Chicago PMI vulnerable to a correction lower in the coming period.
Month-end order flow signals, from our models, are relatively weak this morning, reflecting the small change in US equities over the month. The change in commodities over the month (the CRB is 6.5% higher) does suggest some USD negative order flow â€“ this favours only small short USD positions against the AUD and CAD today.
The trend following model has been flipped out of its short GBP/USD position this morning - the strength in price action yesterday left the short position untenable. In emerging market currencies, USD/PLN has been in a range (2.76-3.00) for approximately three months now. The inability to break-out leaves trend following models vulnerable to whipsaw â€“ our model has jumped into a short position this morning.
This document is confidential, for your information only and must not be distributed, in whole or in part, to any person not involved with the proposed transaction without the prior consent of Lloyds TSB Bank plc (â€śLTSBâ€ť). Whilst LTSB has exercised reasonable care in preparing this document and any views or information expressed or presented are based on sources it believes to be accurate and reliable, no representation or warranty, express or implied, is made as to the accuracy, reliability or completeness of the information contained herein. In particular, whilst we have sought to identify appropriate products and to provide guidance as to how those products might operate under various accounting standards we are not, and should not be considered to be, giving an accounting opinion or advice and you should conduct your own independent enquiries and seek your own professional advice in this respect. Any transaction which you may enter into with us will be on the basis that you have made your own independent evaluations based on your own knowledge and experience and any professional advice which you may have sought in relation to all aspects of the transaction including legal, regulatory, tax or accounting. All terms contained herein, including pricing, are indicative only and subject to change without notice. This material has been prepared for information purposes only and LTSB, its directors, officers and employees are not responsible for any consequences arising from any reliance upon such information. If you receive information from us which is inconsistent with other information which you have received from us, you should refer this to your LTSB Sales representative for clarification. Lloyds TSB Corporate Markets is a trading name of LTSB. LTSBâ€™s registered office is at 25 Gresham Street, LondonEC2V 7HN and it is registered in England and Wales under no. 2065. LTSB is authorized and regulated by the Financial Services Authority. (11.07)
Forex Trading News
Daily Forex Market News Forex news reports can be found on the forex research
headlines page below. Here you will find real-time forex market news reports
provided by respected contributors of currency trading information. Daily forex
market news, weekly forex research and monthly forex news features can be found
Forex News Real-time forex market news reports and features providing
other currency trading information can be accessed by clicking on any of the
headlines below. At the top of the forex blog page you will find the latest
forex trading information. Scroll down the page if you are looking for less
recent currency trading information. Scroll to the bottom of fx blog headlines
and click on the link for past reports on forex. Currency world news reports
from previous years can be found on the left sidebar under "FX Archives."
Elevate Your Trading With The Amazing Trader!
The Amazing Trader includes:
Actionable trading levels delivered to YOUR charts in real-time.
Mon 18 Dec
10:00 EZ- final HICP Tue 19 Dec
09:00 DE- IFO Survey
13:30 US- Housing Starts/Permits
13:30 US- Current Account Wed 20 Dec
15:00 US- Existing Homes Sales
15:30 US- EIA Crude Thu 21 Dec
03:00 JP- BOJ Decision
13:30 CA- CPI & Retail Sales
13:30 US Weely Jobless
13:30 US- GDP Fri 22 Dec
09:30 US- GB- GDP
13:30 US- core PCE Deflator & Presonal Income
15:00 US- New Homes Sales
15:00 US- final University of Michigan
17:00 US- early Closes Mon 25 Dec
00:00 Christmas Holidays
Potential Trading Opportunities
POTENTIAL PRICE RISK: Medium Mon--10:00 GMT-- EZ- final November HICP. flash data are rarely changed.
POTENTIAL PRICE RISK: HIGH- Medium Tue --09:00 GMT-- DE- IFO Survey. Key report but usually not a market-mover
POTENTIAL PRICE RISK: HIGH- Medium- Tue --13:30 GMT-- US- Housing Starts and Permits. Leading indicators of activity
POTENTIAL PRICE RISK: HIGH-Medium- Wed --15:00-- US- Existing Homes Sales. Top Housing statistic
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.
WARNING: FOREIGN EXCHANGE TRADING AND INVESTMENT IN DERIVATIVES
CAN BE VERY SPECULATIVE AND MAY RESULT IN LOSSES AS WELL AS PROFITS. FOREIGN
EXCHANGE AND DERIVATIVES TRADING IS NOT SUITABLE FOR MANY MEMBERS OF THE
PUBLIC AND ONLY RISK CAPITAL SHOULD BE APPLIED. THE WEBSITE DOES NOT TAKE
INTO ACCOUNT SPECIAL INVESTMENT GOALS, THE FINANCIAL SITUATION OR SPECIFIC
REQUIREMENTS OF INDIVIDUAL USERS. YOU SHOULD CAREFULLY CONSIDER YOUR FINANCIAL
SITUATION AND CONSULT YOUR FINANCIAL ADVISORS AS TO THE SUITABILITY TO YOUR
SITUATION PRIOR TO MAKING ANY INVESTMENT OR ENTERING INTO ANY TRANSACTIONS.