Forex Morning Comments: atteso un momentaneo rimbalzo del dollaro
L’accordo raggiunto da Repubblicani e Democratici sull’innalzamento del limite del debito pubblico Usa potrebbe scongiurare un downgrade a breve termine delle principali agenzie di rating e certamente contribuisce a rimuovere il premium risk ad esso associato sul mercato azionario, ma difficilmente potrà allontanare l’attenzione degli investitori sulla reale efficacia delle misure concordate nonchè sull’attuazione del secondo round di tagli al deficit che andrà approvato a Novembre.
Per il momento, l’annuncio dovrebbe sostenere un apprezzamento del Dollaro Usa specialmente nei confronti dello Yen (contro il quale è ancora sui minimi storici, una situazione che potrebbe avvicinare sempre di più un intervento della BoJ): il biglietto verde dovrebbe ora innescare un rimbalzo oltre i 78.50 per poter spuntare una qualche possibilità di rally; per quanto riguarda l’Euro, la moneta unica potrebbe avere già raggiunto i massimi di breve periodo: solo un’accelerazione oltre $1,4576 potrebbe aprire le porte verso nuovi rialzi.
La decisione del governo spagnolo di indire elezioni anticipate offre un ulteriore momento di incertezza circa l’implementazione delle misure di austerity richieste per contenere il debito. Previsioni di ulteriori guadagni invece per il Dollaro Australiano (verso 1.1090), nonostante si stimi che la RBA possa lasciare i tassi invariati nella riunione di domani.
FOREX MORNING COMMENTS
London – 1st August 2011
(Comments below have been provided by CMC Markets Analyst Michael Hewson) The announcement of an agreement with respect to the raising of the debt ceiling overnight between Senate leaders and the President has been greeted with some relief by markets in Asia this morning. Under the deal a $1trn increase in the debtceiling would be coupled with an immediate $1trn cut in discretionary spending.
A further increase beyond 2012 would be decided by a bipartisan committee to propose another $1.5trn of cuts, tax changes and increases, which would need to happen by November.
If this committee fails to come to an agreement on the second part, automatic cuts would be triggered to programs that both Republicans and Democrats have insisted were “red line” issues. Investors are still expected to remain nervous until any agreement is signed off by both houses, and then signed off by the President.
Friday’s unexpectedly disappointing US Q1 revision and Q2 GDP data as well as poor Chicago PMI highlight the challenges facing the US economy, as well as the global economy and the need for the agreement to be ratified in the next day or so.
This morning’s Chinese Manufacturing PMI have sowed some uncertainty as to whether the recent tightening measures by the Chinese authorities are feeding through into slower growth and a slowdown in China after the HSBC measure slipped into contraction territory at 49.3, but the official measure increased from 50.2 to 50.7 for July.
The focus in Europe this morning aside from some relief over the debt ceiling agreement will be on manufacturing PMI data which has shown distinct evidence of weakness over the past few months.
This recent weakness has raised fears about a slowdown in growth across the Euro zone at a time when the most vulnerable economies can least afford it.
Spanish and Italian bond yields are continuing to creep higher and further political uncertainty was added to the mix on Friday by the decision of the Spanish PM Zapatero in unexpectedly calling a general election, in the wake of Moody’s decision to put the country on notice of a further downgrade. This decision by the Spanish PM adds a further element of uncertainty to the economic and political backdrop, and if he loses the election there is no guarantee that any new government will carry out any new austerity measures that need to be implemented in order for the country to avoid being dragged into the mire of needing a bailout. With 10 year yields above 6%, and heading towards the danger level of 7%, any further uncertainty is the last thing the country needs at this moment.
Eurozone PMI for July is expected to remain just about in expansionary territory at 50.4, while German PMI is expected to stay at 52.1. In the UK after last weeks relief at 0.2% growth figures for Q2, attention will now turn to Q3 and the release of July Manufacturing PMI data, with expectations that July will slip back slightly, but remain in solidly expansionary territory at 51 from June’s 51.3. In the US, markets will be hoping for a similar positive story to lift the gloom in the wake of Friday’s GDP data with the release of July ISM Manufacturing, with expectations of a slight fall back to 55, from June’s reading of 55.3. China Manufacturing PMI Jul 50.2/50.9
EURUSD –the single currency continues to hold above the 55 and 100 day MA’s between 1.4315 and 1.4330. The daily reversal candle posted last week continues to suggest we could well have seen the highs in the short term. Only a move beyond 1.4576 targets 1.4700, followed by 1.4875.
There is interim resistance between 1.4420 and 1.4440. Only a daily close below 1.4330 opens the door for a move back to a test of the downside, towards 1.4150.
GBPUSD – the 1.6260 support area remains the key level with respect to further cable gains towards 1.6520 and the highs this year at 1.6745. If the pound slips below 1.6250/60 then we could well get a move back towards 1.6180/1.6200 which acted as strong resistance for most of last week. Only move below 1.6180 retargets the 1.6080 pivot.
EURGBP – while below the 0.8895 area the potential for further losses remains. For now the 0.8705 level remains a tough nut to crack on the downside and with two days holding above the 0.8730 area the potential for a snapback through the 0.8800 level remains higher. While below the 55 day MA, at 0.8835 the risk remains for a move towards the May lows at 0.8610 on break below 0.8700.
USDJPY – the dollar continues to be drawn towards the all-time lows at 76.25, getting to within 50 points of it last Friday. For a rally to gain traction the dollar needs to break above the 78.50/60 level which it struggled to get above in the latter part of last week, The May lows of 79.50/60, which had acted as fairly strong support after the coordinated intervention earlier this year, also remain a strong cap. It should be noted that the threat of further intervention remains very likely and as such it could well be susceptible to sharp short squeezes of the type we saw periodically during last week.
Washington Developments Send Risk Assets Higher
(Comments below have been provided by CMC Markets Senior FX Dealer Tim Waterer)
Positive headlines from Washington have revived market confidence today. Growing anticipation that a calamity will now be averted has brought a collective sigh of relief from the market which now hopes to put the debt ceiling issue firmly in the rear view mirror.
The avoidance of a default will have the Greenback looking decidedly more appealing, particularly against the likes of the Japanese Yen. Against the Australian Dollar however, the USD may continue to slide. Developments on the US debt ceiling could open the taps on the risk trade again which could see the AUDUSD rate move to new post-float highs in the coming days. With Asian bourse’s all well in the black the AUD has pushed back to 1.1050. For the remainder of the session it will look to trade in the 1.1015 to 1.1090 range in the lead up to what will be another eventful offshore session.The economic calendar this week is packed with potentially market-moving events.
Locally the RBA rate decision on Tuesday and Retail Sales numbers on Wednesday will shape the interest rate outlook. US Non Farm Payrolls looms large on Friday which will have a massive bearing on the performance of risk assets to end the week.
Financials Lead Charge Higher
(Comments below have been provided by CMC Markets Chief Market Analyst Ric Spooner)
The strong rally by most Asian equity markets today reflects a view that the US debt ceiling deal will not only avert any risk of default on government obligations but should also be enough to avoid a near term downgrade by ratings agencies. The financial sector led the Australian market higher today. This rally is in response to the reduced short term threat of higher international interest rates due to short term uncertainty over US government debt.
The rally in bank stocks also indicates a majority review that the Reserve Bank will leave Australian interest rates unchanged tomorrow. It will probably not increase rates until it sees evidence of a turnaround in the recent soft patch in both major developed economies and Australia. Friday’s weak US GDP figure of 1.3% growth in the 2nd quarter following only 0.4% in the March quarter underscores the fact that the world’s largest economy is sputtering at levels well below that required to be a major positive for world growth.
While the US debt deal allows investors to remove some short term risk premium from share valuations, the recent episode will keep investors focused on the effectiveness of the US government process in managing its budget and debt risk. The medium term credibility of Congress and the Senate as financial managers will face another hurdle in November when a bipartisan committee is due to reach agreement on further deficit reductions. Falling back on the automatic cuts of around $1.2 trillion agreed in today’s announcement is likely to be seen as a second best option. Markets were also encouraged by today’s government PMI reading in China which held above 50.
This indicates continued moderate growth in the manufacturing sector. However, the market will have a lot of monthly data on economic activity to digest this week. Some of the more important figures are likely to include the Australian retail sales and building approval figures as well as the US nonfarm payroll statistics due on Friday.