M. Hewson: riflettori puntati sulle minute del Fomc
Forex Morning Comments a cura di Michael Hewson (Senior Market Analyst), Tim Waterer (Senior Trader) e Andrew May (Sales Trader) di CMC Markets.
Si aspetta di leggere le minute dell’ultima riunione Fed per poter successivamente analizzare al microscopio qualsivoglia riferimento ad un possibile spiraglio di QE prima della fine dell’anno, anche se da parte nostra lo consideriamo un’opzione piuttosto improbabile per diversi motivi: lo stato di salute dell’economia Usa non è così malfermo da richiederlo, il fatto di trovarsi a pochi mesi dalle elezioni presidenziali è un ulteriore elemento di scoraggiamento.
Il secondo elemento che verrà attentamente scrutinato oggi è il dato sull’inflazione tedesca: una lettura ampiamente sotto il 2% potrebbe innescare la speculazione di un prossimo taglio dei tassi della Bce a fine luglio. Terzo, l’avvio delle trimestrali Usa non sembra essere tra i più incoraggianti. In tale situazione, dunque, gli operatori si sono tutti rispostati in massa sul biglietto verde con buona pace delle valute e degli asset risk-on e probabilmente così rimarranno almeno fino alla pubblicazione del Pil cinese di venerdì. L’impressione è che si stia fermando l’intera sala macchine della crescita e, se così fosse, a risentirne maggiormente ora sarebbero proprio quei mercati e settori che hanno funzionato da “cuscino” proprio perchè dipendenti dalle importazioni asiatiche.
Traducendo il quadro dal punto di vista valutario vediamo allora un Euro sempre più compresso verso i minimi 2010 a 1,1880 nei confronti del Dollaro e verso 0,7784 contro la Sterlina. La moneta di Sua Maestà si mantiene su 1,5460 nei confronti del biglietto verde aumentando così le possibilità di un ritorno a 1,5620. Il Dollaro Usa ha invece perso il livello posto a 79,50 contro lo Yen e ora è chiamato al test di quota 79: solo una chiusura settimanale sopra 80,45 potrebbe cambiarne il corso.
Potenziali notizie negative in arrivo dalla Cina costituirebbero ragioni di vendita anche per Aussie e Kiwi (quest’ultimo dato stabile a 0,7950 nei confronti del Dollaro USA) per quanto i trader siano pienamente consapevoli che un’eventuale introduzione di un QE3 muterebbe completamente le dinamiche dei cambi.
Markets look to FOMC minutes
(Comments below have been provided by CMC Markets Senior Market Analyst Michael Hewson)
In the US last week’s disappointing June non-farm payrolls report has once again shifted the focus back to the “will they won’t they” debate on when the Fed is likely to act with respect to QE3. Given that the FOMC have just extended “operation twist” until the end of the year, it seems very unlikely that they will change tack at the next meeting at the end of this month.
That won’t stop the market from poring over every nuance of today’s published FOMC minutes as it craves further stimulus, like a baby demanding its dummy. Markets will be looking for evidence of excessive dovishness relative to previous meetings, especially as most Fed minutes tend to be dovish anyway.
The fact remains that recent data, while not great, is not terrible either. More than anything its middling, especially when the latest June ADP data beat expectations by quite some distance, which makes the bar for any further Fed intervention that much higher, especially in an election year where any type of central bank intervention could be interpreted as politically motivated.
One other factor to weigh up is that the Dow and S&P500 are well above the levels when the first iteration of “operation twist” was announced last year. For that reason alone it seems unlikely given last week’s dismissive market reaction to the combined Chinese, UK and ECB stimulus measures that the Fed will act unless equity markets nose dive violently, or US data falls off a cliff.
The divide between northern and southern Europe continued yesterday after the Netherlands sold three year government bonds at record low yields as investors went looking for any kind of safe return after French borrowing costs went negative on Monday, joining Germany in the negative yield club.
Spanish and Italian yields slipped back slightly after Spain’s borrowing targets were relaxed and the country was promised €30bn worth of emergency funding. The news that Italian PM Mario Monti would not be standing for re-election in March has made a few investors nervous, given the unpredictable nature of Italian politics. That however is a story for another day.
In the light of last weeks ECB rate cut today’s latest German June CPI figures are likely to be scrutinised for evidence of further deflationary pressure in Europe. A significant move below the annualised 2% level is likely to raise speculation about a further rate cut at the August meeting of the ECB. The level of interest rates however is the least of Europe’s problems given the concern currently surrounding the ratification of the new bailout mechanism the ESM, which should have been active buy now.
The German constitutional court is in the unenviable position of having to rule on the legality of the new bailout mechanism in response to a number of lawsuits from across the political and professional classes concerned at the sovereignty overreach that the new legislation poses. Political pressure is being exerted with German finance minister Schaeuble warning of serious consequences if the case goes on for too long, which could throw the euro project into doubt.
This attempt to bounce the judges into a quick decision hasn’t gone down that well inside Germany; however the delay isn’t likely to be too serious, despite the headlines, given that the EFSF still has funds available to it.
EURUSD – another new low at 1.2235 keeps the pressure on the downside for a move towards the 2010 post first Greek bailout lows at 1.1880. The risk of a pullback towards the 1.2450 level remains a possibility, while at these low levels. A daily close back inside the triangle retargets the highs last week and 55 day MA at 1.2680, while behind that the 50% retracement level of the 1.3285/1.2290 down move at 1.2790.
GBPUSD – the continued support just above the 1.5460 level keeps the recent range intact and makes the likelihood of a squeeze back higher towards the 1.5620 level a distinct possibility. A move below 1.5460 is likely to indicate the first signs of a return to the June low at 1.5270. Below 1.5250 signals a risk of a return to the July 2010 lows at 1.4950. The 200 day MA at 1.5755 remains the key resistance on the topside. Only a close beyond 1.5755 the 200 day MA could target 1.5910, which would be the 61.8% retracement of the 1.6305/1.5270 down move.
EURGBP – the move yesterday below the 0.7900 level keeps the momentum going for the move towards the 0.7784 level, which is 61.8% retracement of the entire up move from 0.6535 and 2007 lows to the 2008 highs at 0.9805. Intraday resistance lies at the 0.8000 level, while the main resistance remains around the 55 day MA at 0.8060 and trend line resistance from the highs this year at 0.8505 at 0.8065.
USDJPY – the trend line support at 79.50/60 from the 4th June lows at 78.00 has given way and suggests we could well see a test of the 200 day MA at 79.00. The main resistance remains at the top of the cloud at 80.45 we need a weekly close above 80.50 to reassure about further upside.
Forward Momentum Distinctly Lacking
(Comments below have been provided by CMC Markets Senior Trader Tim Waterer)
Financial markets do not need much convincing to be in selling mode this week. Despite some relief on the Spanish yield front, the ESM court case in Germany and doubt over how well US earnings season will pan out has traders cagey about buying again.
The Greenback continues to be the currency of choice in the current trading environment, particularly given that US corporate earnings results are predicted to come up short. Add into the mix the fear of further stagnation among EU leaders and it becomes apparent why traders are leery of going long on the EURUSD pair at this stage of proceedings.
However any introduction of QE3 over coming months would significantly change the dynamics of the Euro-Dollar movements, so the current downtrend of the EURUSD pair could reverse course quickly if the Fed happen to get trigger happy on more quantitative easing.
Signs of forward momentum have been distinctly lacking from the Australian market this week, with the ASX200 seemingly stuck in reverse gear courtesy of the international headwinds. We have not exactly been receiving fantastic leads from the US market lately which has been putting the local index on the back foot right from the get-go.
The bellweather mining stocks on the Australian market have been susceptible to the lower commodity prices resulting from US Dollar strength over the past week, with BHP and RIO dragging the chain to a large degree as a consequence. Another factor weighing on the ASX200 market today, and indeed on the AUD, was the prospect of more alarming Chinese economic indicators with GDP due on Friday. US Trade Balance data tonight as well as the FOMC minutes closely watched this evening as will the continuation of earnings season.
Premature Chinese growth deflates Kiwi
(Comments below have been provided by CMC Markets Sales Trader Andrew May)
Astonishingly enough, traders were expecting a somewhat conservative number when the June Chinese trade balance popped up yesterday. However, they found themselves a little shocked that imports were well under par at 6.3%, practically half the May figure (12.7%) and what was expected for June (11%).
The NZDUSD had its wings clipped in spectacular fashion as a consequence and fell 35pts to 0.7930. In reality this is now confirmation of a slowing down of the world’s second largest economy despite recent monetary stimulus efforts late last week.
The Chinese growth spurt that cushioned Australian and New Zealand economies during the GFC is now clearly lagging, taking with it the demand for raw commodities. This is proportionately bad news for Aussie and Kiwi exporters reliant on Asian buoyancy.
Nevertheless, risk on, risk off appetite will continue to support the NZDUSD well over 79c for the medium term. We’ll be awaiting Chinese GDP due Friday for signs of life above 7.7%, yet can’t turn a blind eye to Europe’s woes either. Spanish bond yields continuously teetering into 7% ‘no man’s land’ and Greek bond redemptions due 20 August implying the Greek government will ask for leniency on their current bail out, will sustain the resilient tug of war between the safe haven greenback and risk sensitive currencies.
With the Kiwi battling on through market volatility, subdued earning fears citing S&P stocks to fall 1.8% for the June quarter and generally weaker stocks in the interim, expect to see a 75pt leeway either side of 0.7950.