Forex Morning Comments: riflettori puntati sul mercato del lavoro Usa
Il consensus de mercato sembra orientato a credere che, qualora anche il dato sull’occupazione Usa in uscita oggi si riveli al di sotto delle aspettative, la Fed non possa che intensificare l’allentamento quantitativo a partire dalla prossima riunione del FOMC a settembre, a prescindere dagli effetti che quest’ulteriore stimolo possa avere o meno sull’economia. Il dato americano sarà attentamente analizzato anche per capirne gli effetti sui movimenti valutari: un eventuale miglioramento del mercato del lavoro americano infatti non potrà che riflettersi positivamente anche sulle monete che si apprezzano quando torna la propensione al rischio, ovvero Euro,Sterlina e Dollaro Australiano (con quest’ultimo deestinato a rafforzarsi in maniera più importante rispetto alle altre due valute, più legate alle fortune altalentanti dell’economia europea).
Secondo le stime degli analisti, qualora la RBA mantenesse fermi i tassi, l’Aussie ai livelli attuali sarebbe sottovalutato di alcuni centesimi. In attesa di conoscere il dato europeo sull’inflazione per il mese di agosto, l’Euro continua il suo movimento laterale mentre la mancanza di un rimbalzo nei rendimenti dei titoli decennali americani limita in questo momento qualsiasi impulso rialzista del Dollaro sullo Yen.
FOREX MORNING COMMENTS
London – 31th August 2011
(Comments below have been provided by CMC Markets Analyst Michael Hewson)
Yesterday’s plunge in US consumer confidence to 44.5, its lowest level since 2009, aligned with yesterday’s FOMC minutes, appear to have reinforced the markets belief that the Fed may well embark on further easing at the next FOMC meeting in September.
The problem will be in determining the type of measures the Fed could adopt given the splits illustrated by the tone of the minutes. Some members advocated stronger measures then the low rates until 2013 pledge, while against that were the three dissenters, though that could well have become two now given Kocherlakota’s rather dovish comments yesterday.
There is also the added problem that irrespective of any steps the Fed could take they would be unlikely to make much difference to the economy, with sentiment remaining fragile and growth slowing.
The markets belief in further easing will no doubt intensify if today’s US ADP employment report for August also misses consensus with expectations for a gain of 100k, down from July’s 114k.
US Chicago PMI could well also miss to the downside in the wake of recent disappointing economic data with expectations of a fall from July’s 58.8 to 53.5, though given the softness of recent data there is a fear it could well fall below 50. In Europe this morning particular attention will be focussed on Eurozone CPI data for August, which is expected to remain unchanged at 2.5%, after Trichet’s recent comments about reviewing the risks to price stability suggested that the ECB was softening its recent inflationary tone. Italian CPI is expected to rise 0.2% month on month after July’s 1.7% plunge.
Of more importance to hopes for growth in Europe after yesterday’s disappointing Eurozone business and consumer confidence numbers will be German retail sales and unemployment data for August. German retail sales for July are expected to drop sharply by 1.5%, while unemployment is expected to remain unchanged at 7.7% and at 9.9% in Europe.
In the UK consumer confidence continues to fall on the Gfk level with the August number sinking to a four month low at -31 as the riots at the beginning of the month impact on sentiment.
Gold continues to find support after its recent plunge after Chicago Fed president Charles Evans said that he was “somewhat nervous” about the US economic recovery, and favoured further stimulus to support an ailing economy.
EURUSD – the single currency continues to remain resilient to downside against the US dollar but has, as yet, failed to get above the major resistance remaining between July’s peaks between 1.4535 and 1.4575/80. Above here re-targets the 1.4700 level. To open up a move towards the 1.4030 area the euro needs to push back and close below the 55 day MA at 1.4330, which has acted as support for the last five days. There is also minor trend line support from the 1.3835 lows currently around the 1.4270 level. he major support lies around the 1.4030 area where the 200 week moving average sits.
GBPUSD – Friday’s failure to break below the support around the 1.6220 area and 55 day MA last week caught the bears out and provoked a sharp pull back, as the cable remains stuck in its broad range. t really needs a concerted break below 1.6220 to retarget 1.6170, while the 200 day MA remains the key support at 1.6110/20, and a sustained break below could well target further losses. ullbacks should continue to find resistance between 1.6450 and 1.6520.
EURGBP – the single currency, having broken above the 55 day MA, now at 0.8824 continues to hold above it as it looks to break above the August highs at 0.8885. Until it does so the recent range continues to hold sway. To diminish the risk of a break higher we need to say the single currency push back and close below the 0.8820 level to open up 0.8750 again.
The major support remains at the 200 day MA now around the 0.8675/85 area. Only a close below the 200 day MA has the potential to retarget the May lows at 0.8610 and ultimately the trend line support at 0.8565 from the 2010 lows at 0.8065.
USDJPY – the market continues to look as if it is building up a pretty solid base around the major lows around the 76.00 area, and while this holds we could well see further gains; however the lack of any rebound in US 10 year bond yields is limiting the dollar’s upside here. Any move below these key lows could well see further US dollar losses towards 74.50. Though last weeks move above 77.20 wasn’t sustained it doesn’t mean the market won’t have another crack at it. If we take out 77.60 then the odds will have shifted further towards a test of the 55 day MA and bigger resistance level at 79.50/60.
Flat Day For Currencies Ahead Of US ADP Employment Data Tonight
(Comments below have been provided by CMC Markets Senior FX Dealer Tim Waterer)
We have arrived at the last day of the month and I don’t think many traders will be shedding a tear as August 2011 goes off into the sunset. Mercifully, the mayhem of the first half of the month dissipated somewhat however the market is still trying to rebuild from the earlier damage done.
Fridays’ US Non Farm Payrolls is looming large as always, but before that we have the ADP Private Employment report which will have a bearing on how warmly risk currencies are received in the coming few trading sessions. The better the US Labour market appears to be, the better risk currencies will perform. It is looking like currencies will sit tight during the Asian trading session today ahead of the US data tonight. The 1.0640-1.0710 range looks likely for the AUDUSD today.
The Australian dollar has kicked some goals this week already by advancing over 1c higher since Monday and spending some time above the 1.07 level. In doing so it has outperformed the like of Euro and Sterling which are obviously more closely intertwined with ongoing questions concerning European economic health.
Additionally, it is still very much debatable that the expected RBA rate cuts currently priced into the AUD are entirely justified. It seems that over the past month, it has been everyone except most notably the RBA saying that monetary policy easing is on the way. So if conditions improve enough so as to allow the RBA to hold fire on rates, the AUD could conceivably be a few cents undervalued at the current levels. There is still a lot to play out however before we know the answer to this.
Month-end Buying Gives Support To Quiet Market
(Comments below have been provided by CMC Markets Institutional Equities Dealer David Barrett-Lennard)
The market found some afternoon support with the talk of month-end buying being supportive in an otherwise quiet market. We had a muted lead from US markets overnight which finished marginally higher despite negative data being released. A market running higher on low volumes, on negative data and after a recent rally can often mark the highs and a sell off/ correction can often ensue. We may have another strong night on month end buying, but the recent feels like it might be running out of puff somewhat.
Macro directional calls are very tough to make in this environment with Europe continuing to teeter on the brink, but a very well respected local strategist (Richard Coppelson of Goldman Sachs) was highlighting that last night’s dire consumer confidence reading of 44.5 (falling from 59 in July) which incorporated the S&P downgrade to the US credit rating and the August market meltdown, has historically acted as a very good contrarian indicator and indeed marked market lows.
Also supportive today was a note from Macquarie arguing the global market turmoil of August has gone a long way to highlighting the relative economic strength of Australia and our leverage to developing markets over the medium term, and that resultantly it is time to go overweight Australia.
Another point to note, and likely explaining the outperformance of the bulks and materials sector, is the fact that iron ore hit a 3 year high last night on a report that India will raise export duties again – obviously beneficial to iron ore based producers outside of India.
Ongoing corporate activity continued in the coal sector today, with WHC the centre of attention after a $360m sell down. CSFB sold a 13.1% ($390m) block to local & offshore institutionals, after the two largest shareholders US private equity group First Reserve and ACMI reduced their stakes to 14.7% and 9.7% respectively. The stock traded below the sale price of $6, with the overhang likely to remain as market participants attempt to guess intentions regarding the remaining stake.
The sale opens up the register somewhat, increases the free float to around 50% and also increases the chance index re-weightings. Despite the failed sale attempt earlier this year and remaining stake overhang, a control premium is likely to build back into the stock.