Thursday June 28, 2007 - 10:53:53 GMT
Share This Story
Black Swan Capital - www.blackswantrading.com
Black Swan Capital -- Currency Currents
Thursday 28 June 2007 EDT http://www.blackswantrading.com
â€˘ BANKS STRUGGLED to find buyers for several takeover-related debt offerings. Easy credit has been the driving force behind the rash of buyouts, and investors' reluctance to buy risky debt could put the boom in jeopardy. -- WSJ
â€˘ (Bloomberg) -- Germany's unemployment rate fell to the lowest level in 12 years in June as growth in Europe's largest economy encouraged companies to invest and hire.
â€˘ Key Reports Due (WSJ):
8:30a.m. Initial Jobless Claims. Expected: -9K. Previous: +10K.
8:30a.m 1Q GDP, Final. Expected: +0.8%. Previous: +0.6%.
8:30a.m 1Q Corp Profits, revised. Previous: +1.0%.
10:00a.m. May Conference Board Help-Wanted Index. Previous: 29.
10:00a.m. DJ-BTMU Business Barometer. Previous: Unch.
11:00a.m. June Kansas City Fed Mfg Index. Previous: 20.
2:15p.m. Two-Day FOMC meeting ends; interest rate decision expected. Previous: Unch.
â€śSecurity is the mother of danger and the grandmother of destruction.â€ť
FX Trading â€“ Your Thursday Forex Melting Pot
Does anyone elseâ€™s neck hurt?
All this up and down, back and forth stuff makes me think weâ€™re on some type of whacked-out carnival ride.
The British pound is dancing with the $2 per pound level like a Mexican jumping bean. Itâ€™s back over that mark today as housing prices in the region increased in June at their fastest pace in nearly two and a half years.
Thatâ€™s got traders salivating in anticipation of higher Bank of England interest rates. The central bankâ€™s main man Mervyn King is due to speak later today. Itâ€™s expected heâ€™ll give something nice and juicy to chew on ahead of the bankâ€™s meeting next week to discuss monetary policy.
The yen strung together a couple of hugely positive sessions, but are we all done? Is that all the yen can muster? -- Hardly. Although a potentially slower than expected Japanese economy sure wonâ€™t help out efforts aimed at unwinding some of the carry trade.
News out overnight showed a slowdown in Japanese industrial production for a third month in a row. The Bank of Japan has made it clear theyâ€™re closely watching the data before making any decisions on future interest rate increases.
Even though Japanâ€™s economy ainâ€™t all that bad anymore, until consensus expectations change and the Bank of Japan gets down to business, traders will need some other catalyst to drive the yen higher.
High-yielding currencies like the Australian dollar and New Zealand dollar moved sharply off their highs in light of carry trade reduction. But theyâ€™ve already turned it around and are locked in again on recent highs. Should these levels prove formidable resistance we could see renewed selling that would send these high-yielders back down, farther and faster than before.
Who knows, that might be enough to induce a fresh wave of yen buying.
The Canadian dollar is still mostly wrapped up with crude oil prices in a game of follow the leader. As you can see in the chart, the Loonie is still in a corrective channel since touching 30-year highs against the dollar.
Now Iâ€™m no energy expert. Heck, I donâ€™t even play one on TV. But I did stay at a Holiday Inn Express last night.
Just kidding, I stayed in the comfort of my own home, like usual, but I did read an interesting article that spoke about Canadaâ€™s oil biz. The piece mentioned the importance of increasing pipeline capacity in Canada. Why? Well because U.S. oil refinery demand for Western Canadian crude oil is set to double by 2015.
Yikes! Thatâ€™s still a good number of years out, but itâ€™s stuff like that indirectly driving Canadaâ€™s dollar toward U.S. dollar parity.
The euro is still struggling with key resistance; its near-term performance will likely hinge upon the U.S. dollar.
Due out today in the U.S. are final figures for first quarter GDP. Not a whole lot new expected from that report, just confirmation of measly 0.8% growth.
But later in the day is the FOMC interest rate announcement. Iâ€™m pretty confident the Fed stays put and attempts to signal no bias toward either tightening or easing its monetary policy. After all, Ben Bernanke and his buddies still have to juggle a crappy housing market and the economyâ€™s various other less-than-stellar growth components -- this all while keeping inflation expectations in check.
The buck has avoided significant across-the-board selling recently. But thereâ€™s a lot leaning on its bad side.
John Ross Crooks III
Black Swan Capital
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
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."