Market Commentary: l’eurodollaro verso l’ostacolo posto a 1,2825
I mercati oggi stanno riflettendo lo scenario peggiore con gli investitori che si muovono in branco sui titoli azionari che hanno toccato i livelli minimi delle ultime sette settimane. Il discorso di Obama non è riuscito a placare i timori relativi al Fiscal Cliff, anzi, si delinea ora una separazione se possibile ancora più netta tra Democratici e Repubblicani sulla questione fiscale e, in aggiunta, la recessione peggiore del previsto in Europa che scatena protesta anti-austeruty e l’escalation di tensioni nella Striscia di Gaza sono tutti elementi che potrebbero contribuire a pesare ulteriormente sul sentiment e generare un panic selling, così come un’eventuale contrazione europea che proseguisse anche per il quarto trimestre dell’anno (come evidenzierebbero i primi dati). Un quadro in tale deterioramento che ha spinto il FMI a chiedere nuovamente che si metta mano ad una ristrutturazione del debito greco, epilogo che, benchè contrastato, sembra ormai inevitabile.
Sul fronte valutario ripresa dell’Eurodollaro che si muove sopra 1,2740 e ora si trova a dover fronteggiare l’ostacolo posto a 1,2825 prima di ripartire; scivola ulteriormente il cable verso 1,5790 mentre la moneta unica continua a rafforzarsi nei confronti della Sterlina (verso 0,8075).La rottura rialzista di 79,70 porta il Dollaro Yen in orbita 81 con prossimo target a 81,80.
European GDP story expected to remain bleak
By Michael Hewson (Senior Market Analyst at CMC Markets UK)
The larger than expected contractions in Greek and Portuguese Q3 GDP yesterday merely served to underline the reasons behind the widespread protests against austerity measures which unfolded all across Europe. With unemployment continuing to rise, Portugal’s rose to 15.8% according to data released yesterday, protests and unease are growing across all of Europe as to the direction that official policy is taking the direction of the number of unemployed and growth prospects. The likelihood is that this anger will continue to grow unless European leaders and policymakers start to act as if they have a clue as to how to resolve the crisis starting to unravel before their eyes.
Following on from yesterday’s disappointing numbers out of Greece and Portugal, markets will also be looking at the latest revisions to Q3 GDP for Spain, Italy, France and Germany. Spain is expected to be confirmed at -0.3%, Italy -0.5%, France 0% and Germany 0.1%. The combined Eurozone number is expected to show a quarterly contraction of 0.1%, confirming the region is in a double-dip recession. This might not be too much of a concern if it was expected to be a one-off but initial analysis of some of the data so far in Q4 suggests that the final quarter of 2012 will be even worse than Q3.
This deterioration has prompted IMF chief Christine Lagarde to call once again for a “real fix” for Greece as the organisation continues to push back against EU leader’s reluctance to countenance a debt restructuring, despite the fact that it remains inevitable, at some point in the future.
While this week’s UK data hasn’t been that bad compared to Europe, the outlook for growth continues to remain cloudy. Bank of England governor Mervyn King’s pessimism won’t have helped yesterday but this week’s economic data does bear out that reality. The rise in October jobless claims, the bigger than expected rise in inflation, as well as the rise in average earnings, points to a consumer that will continue to feel the pinch.
This is likely to be borne out in today’s October retail sales data which is expected to come in negative at -0.1%, down from September’s 0.6% rise. The September numbers had managed to get a boost as people went out and spent money on new clothes after the Olympics had finished, however with prices rising on food and energy we could see a fall back in October.
Given that inflation outstripped average earnings by over two to one in October, and with Christmas fast approaching, it seems likely that cash strapped consumers could well rein in their spending after the rise seen post Olympics, and hold back further expenditure until just before Christmas, when prices might start to come down as retailers look at discounting.
EURUSD – yesterday’s move above 1.2740 triggered a range of stops to 1.2770, but the real barrier remains at 1.2825 and the 200 day MA. The key support remains at the 1.2650 level and 100 day MA, while just below that we also have 1.2605 which is 50% retracement of the 1.2045/1.3170 up move. A rebound needs to overcome the 1.2900 level to stabilise and target 1.3000.
GBPUSD – yesterday’s close below the 200 day MA at 1.5850 opens up a move towards 1.5790 trend line support from the 1.5270 lows as well as 1.5660. Rebounds need to get back above the previous support level at 1.5960 level to retarget last week’s high at 1.6050.
EURGBP – the break above 0.8030 yesterday suggests a move towards the 31st October highs at 0.8075 and the 200 day MA at 0.8084. A move back below 0.8000 suggests a revisit of the lows this month at 0.7955.
USDJPY – yesterday’s break above the 79.70 level and 200 day MA has sent us back above the top of the recent range at 80.70. The next target now lies at 81.80. The 79.75 level should now act as support; otherwise we’ll end up heading back towards last Friday’s low at 79.00.
Investors Flee as Equities Hit New Lows
(By Ben Taylor, Sales Trader at CMC Markets)
Markets are reflecting worse case scenarios today with investors fleeing in droves as equities hit seven week lows following falls in European and US markets overnight.
Miners and Banks have taken the largest hits today as a myriad of events plague our market. Obama’s speech failed to calm the markets anxiety over the pending fiscal cliff, details emerged that Greece’s recession is deepening, and tensions escalating in the Middle East all added to the panic selling.
Obama’s speech overnight is the key reason we are taking such a hit today. While the markets were hoping for the Democrats and Republicans to stop playing hardball and find some middle ground the opposite seems to be happening. Obama believes he has a mandate from the people to repeal the Bush tax cuts for high income earners, which the Republicans strongly oppose. Increasing taxes for the rich has the two parties in a stalemate and is not something the market wanted to hear.
News of Israeli airstrikes on the Gaza strip and a flash estimate that had Greece’s GDP contracting further ahead of new austerity measures have done little to incite confidence at this time. oday’s inflation expectation did provide a little ray of hope, with inflation sitting at the lower end of the band providing the RBA with room to move. Given the increasing risk from a macro level the chances of a cut in December are getting better.