A. Laidi: il downgrade del Giappone spinge al rialzo il dollaro
Commento di Ashraf Laidi (Chief Market Strategist di CMC Markets) sulle possibili conseguenze del downgrading sul debito sovrano del Giappone da parte di Standard and Poor’s.
JAPAN DOWNGRADE OFFERS USD RISK SUPPORT
• Yen has been hit across the board, but it is the USD that is broadening its gains, dragging the high yielders lower
• EURUSD faces considerable resistance $1.3750 as overbought dynamics stand in the way
• Markets turning to EURJPY longs as an alternative following Japan’s downgrade eyeing 114.50s
• Threat of a Chinese rate hike next week (ahead of Chinese New Year) is likely to further trigger risk aversion in precious and base metals
London – 27th January 2010
S&P cuts Japan’s sovereign debt rating to AA- from AA while keeping its outlook stable. Yen has been hit across the board, but it is the USD that is broadening its gains, dragging the high yielders lower. S&P’s decision is seen as minor catalyst to removing some of the froth building in US equities, and likely prevent the Dow-30 to post its 9th consecutive weekly increase since 1995. The last time Dow-30 posted 8 consecutive weekly gains was in Mar-Apr, 6 days after which the Flash Crash (May 6th) headed a 2-month sell-off.
AUDUSD drops more than a full cent, now at 0.9888, eyeing 0.9820. The H&S formation in Aussie remains intact as long as the right shoulder at 1.0030 continues to hold. Similarly, GBPUSD faces the same barrier at 1.6080 (Sep 09 trendline) off by over a half a cent to 1.5888. Interim support stands at 1.5760s. EURUSD faces considerable resistance $1.3750 as overbought dynamics stand in the way. Only a decline below $1.3460s would draw the selling attention back down below $1.30. Sentiment in the euro has changed swiftly despite remaining fundamental questions (Portugal banks, Irish political uncertainty). Markets turning to EURJPY longs as an alternative following Japan’s downgrade, eyeing 114.50s.
Although none of the FOMC members dissented at the decision to maintain QE2, there is speculation that Philadelphia Fed’s Plosser and/or Dallas Fed’s Fisher will demand the end of QE2 as early as the March FOMC meeting. The fact that the FOMC mentioned rising commodities in yesterday’s statement suggests the central bank may be scrutinizing any bottoming of disinflation. This means that each and every speech by voting Fed members will be closely watched for any new attention towards inflation, in which case should boost US yields and help stabilise USD. One reason why US yields rallied after yesterday’s FOMC decision (despite consensus for QE2) was the mentioning of rising commodity prices by the central bank.
Intermediate bearishness on gold and silver remains, with interim targets seen at $1,288 and $23/oz respectively. Today’s S&P downgrade may have boosted Gold against yen but the threat of a Chinese rate hike next week (ahead of Chinese New Year) is likely to further trigger risk aversion in precious and base metals.