European Market Update: Bernanke calls for global rebalancing; PBoC responds with tepid RRR increase (TTN)
Friday, November 19, 2010
European Market Update: Bernanke calls for global rebalancing; PBoC responds with tepid RRR increase
***Economic Data*** - (GE) Germany Oct Producer Prices M/M: 0.4% v 0.3%e; Y/Y: 4.3% v 4.1%e - (GR) Greece Sept Current Account: -â‚¬1.3B v -â‚¬259M prior - (TT) Taiwan Oct Export Orders Y/Y: 12.3% v 14.1%e - (HU) Hungary Sept Avg Gross Wages Y/Y: 2.3% v 1.6%e - (AS) Austria Sept Producer Price Index M/M: 0.3% v 0.1% prior; Y/Y: 3.3% v 3.9% prior - (TT) Taiwan Q3 Current Account: $9.0B v $9.2Be - (NV) Netherlands Sept Consumer Spending Y/Y: 1.5% v 1.4% prior - (IT) Italy Sept Industrial Orders M/M: -1.2% v -2.0%e; Y/Y: 17.9% v 17.0%e - (IT) Italy Sept Industrial Sales M/M: -0.2% v 2.6% prior; Y/Y: 10.8% v 13.8% prior - (PD) Nov Central/Eastern European ZEW: 31.4 v 19.3 prior
*** SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM ** Notes/Observations: - Hong Kong confirms plans to implement additional measures to slow the property market - Market believes that China PBoC will again raise interest rates before year end. PBoC did raise the RRR once again - Fed's Bernanke defends launch of QE and stresses the importance of currency flexibility. Mirrors US Tsy view that recent USD weakness reflects reversal of safe haven flows
Equities: EuroStoxx 50 at 2847, -0.26%, FTSE100 at 5731,-0.66%, CAC40 at 3864, -0.10%, DAX at 6832, +0.01%
- European shares opened up but slipped in negative territory during the session. Ireland continues to dominate markets as the situation remaining unclear. Investors will refrain from making a bold move ahead of potential requests from EU and IMF in case of a potential bailout in Ireland. The main focus is the corporate tax rate of 12.5%, lower than the European average. Ireland is being pressured by the EU and IMF to raise the rate, a request that the Irish govt has refused to negotiate. Mining stocks also fell as traders are focusing on a Chinese signal of monetary policy tightening. - As earnings season is slowing down, there were few companies providing an update on their operations. Yesterday after the EU close, it was reported that Safran would not make an offer for Zodiac as conditions for a friendly combination were not in place. Shares of Zodiac fell about 9% at the open, while Safran climbed about 4%. New World Resources, the coal and coke producer, disappointed markets as results failed to beat expectations. Company said it was on track to meet their production guidance and reported a 9% and 63% in coal and coke external sales. Shares are trading down by almost 3%. Dutch semiconductor ASML [ASML.NV] opened higher by 1% and continues to trade in positive territory after company stated that the it expected logistics and foundry systems to show strong growth in 2011. Also planned to use use extra cash for dividends and share purchases. - Investors are awaiting an interim update from Allied Irish Bank following the visits of EU and IMF officials. The company is due to issue the report today during the day.
Speakers: - ECB's Stark started off the day-lng ECB conference in Germany stating that monetization of gov't debt must be avoided. He added that monetary policy must be directed towards the medium term and avoid fine-tuning temptations in the short term. - Attending the ECB conference Greek Fin Min Papaconstantinou observed that Ireland problems stem from its banking sector (thus different from other sovereign woes). He added that decisions must be made regarding Ireland. - EU Spokesperson stated that Commissioner EU's Rehn canceled his ECD conference appearance to focus on Ireland's talks. The spokesperson added that there no imminent announcement was foreseen on Ireland - Japan PM Kan stated that Japan to support the USD as key global reserve currency since there are no alternatives - ECB's Gonzalez-Paramo spoke in Spain that the decision on aid was up to Ireland and commented that governments must take steps to help lower market tensions. - PBoC: Purpose of reserve ratio hike is to strength liquidity management
Currencies: Risk appetite began the European session aided by several factors. Fed's Bernanke prepared remarks were pre-released ahead of his schedule panel appearance at the ECB banking conference in which the Chairman defended the launch of its QE2 measures. The formal start to the Irish examination by IMF officials continued to provide expectations of an Ireland aid package. Lastly a reversal in the last hour of the Shanghai Composite from -2.0% to +0.8% helped to sooth concerns on a potential PBoC rate hike that was rumored all week. - The EUR/USD moved above the 1.37 handle as dealers took notice that that Bernanke's comments stressed the rebalancing of the global economy and implied it to mean a weaker USD. CitiFX analyst once again recommended clients to establish long Euro positions suggesting purchases at 1.3580 with stop loss placed below 1.3550 (and no upward price target provided). - The USD briefly popped higher after the PBoC raised its reserve requirement ratio (RRR) for the fifth time this year by 50 bps. However, the USD returned to session lows after the market realized it was NOT the rate hike it was long fearing.
Geopolitical/In the papers: - The Telegraph's Evans-Pritchard noted that the ECB warned it will move forward with exiting easy policy measures even if hurts peripheral countries. He references comments from ECB's Trichet in which he warned about banks becoming dependent on emergency measures. The article notes a rise in ECB rates would hurt mortgage holders in Spain, as these loans are linked to the Euribor rate. - Analysts reacted to the recent monthly UK government borrowing and retail sales data according to an article in the Telegraph. In the article, an economist at IHS Global Insight reported that the government is on pace to meet their budget targets, while others believe if the UK's growth is worse than expected, the targets may not be met. In terms of retail sales figures, Capital Economics believes that the data suggested a tepid recovery in retail sales, but believes sales could weaken in 2011.
***Looking Ahead *** - (CO) Colombia Central Bank Interest Rate Decision: Expected to maintain the Overnight Lending Rate unchanged at 3.00% - (RU) Russia Q3 Foreign Direct Investment (FDI) % v -11.0% prior - 6:00 (IR) Ireland Sept Trade Balance: No est v â‚¬3.8B prior - 7:30 (GE) IMF Chief Strauss-Kahn, ECB's Trichet and Weber speak in Frankfurt - 8:00 (PD) Poland Oct Sold Industrial Output M/M: 0.0%e v 13.2% prior; Y/Y: 10.1%e v 11.8% prior - 8:00 (PD) Poland Oct Producer Prices M/M: 0.2%e v 0.1% prior; Y/Y: 4.1%e v 4.3% prior - 8:45 (EU) ECB's Constancio, Tumpel-Gugerell Speak in Frankfurt - 10:00 (PO) EU Leaders meet President Obama in Lisbon - 9:00 (BE) Belgium Nov Consumer Confidence: No est v -2 prior - 11:30 (BR) Brazil Oct CAGED Formal Job Creation: 169.0Ke v 246.9K prior - 14:00 (AR) Argentina Sept Economic Activity Index M/M: No est v 0.3% prior; Y/Y: 8.8%e v 8.5% prior - 14:00 (AR) Argentina Industrial Production M/M: No est v 1.2% prior; Y/Y: 9.0%e v 10.1% prior
Legal disclaimer and risk disclosure
All information provided by Trade The News (a product of Trade The News, Inc. "referred to as TTN hereafter") is for informational purposes only. Information provided is not meant as investment advice nor is it a recommendation to Buy or Sell securities. Although information is taken from sources deemed reliable, no guarantees or assurances can be made to the accuracy of any information provided. 1. Information can be inaccurate and/or incomplete 2. Information can be mistakenly re-released or be delayed, 3. Information may be incorrect, misread, misinterpreted or misunderstood 4. Human error is a business risk you are willing to assume 5. Technology can crash or be interrupted without notice 6. Trading decisions are the responsibility of traders, not those providing additional information. Trade The News is not liable (financial and/or non-financial) for any losses that may arise from any information provided by TTN. Trading securities involves a high degree of risk, and financial losses can and do occur on a regular basis and are part of the risk of trading and investing.
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 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.
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.