Market Commentary: lo scenario risk-on sembra favorire l’Euro
Per quanto la settimana in corso ci abbia riservato notizie positive dal fronte della risoluzione del problema del debito greco e del risultato dell’unione bancaria europea, la situazione economica nel Vecchio Continente continua ad essere preoccupante data la mancanza di prospettive di crescita così come evidenziato dagli ultimi tagli di rating e dalla riduzione delle stime sul Pil per il 2013.All’orizzonte si profila un leggero miglioramento nell’indice manifatturiero, ma le brutte notizie sembrano prevalere, con il calo incessante dei prezzi del mercato immobiliare spagnolo e un’ormai prossima bocciatura del rating Uk anche da parte di S&P.Dall’altra parte dell’Oceano gli attesi passi avanti sul Fiscal Cliff faticano a materializzarsi, rendendo sempre più probabile una soluzione last-minute, o per lo meno questo è ciò che parrebbero attendersi i trader che – per la prima volta dall’inizio della Grande Crisi Finanziaria – stanno prezzando con i loro acquisti uno scenario favorevole nonostante le incertezze dell’uopo.
Dovessero sbagliarsi, prepariamoci ad un sonoro tonfo. Il quadro (momentaneamente ancora risk-on) sembra favorire l’Euro che nei confronti del Dollaro potrebbe ora superare 1,3175 e muoversi verso 1,3400; nessuna grande reazione negativa della Sterlina alla notizia che S&P ha messo l’outlook negativo sul debito britannico: oltre 1,6180 il pound potrebbe raggiungere 1,6300 contro il Dollaro. Prosegue la forza rialzista del Dollaro contro Yen: la rottura al rialzo di 84,00 aprirebbe la strada verso 85,55 i massimi 2011.
European PMI’s expected to show small improvement
By Michael Hewson (Senior Market Analyst at CMC Markets UK)
Recent growth downgrades for Europe by bodies like the ECB and OECD have highlighted the difficulties faced by European governments when dealing with countries with rising debts and shrinking growth prospects. There is a particular concern more recently surrounding Germany’s growth prospects after last week’s actions by the Bundesbank in slashing their forecasts for 2013 from 1.6% to 0.4%. Though markets reacted positively to this week’s very good December ZEW economic sentiment survey these sentiment surveys have a tendency to be rather flaky and volatile as economic conditions change.
Even though we have had some positive news flow in the last couple of days with respect to Greece and initial steps on a more integrated European banking union at this week’s EU summit there has been precious little discussion given over towards steps to promote economic growth and this is expected to be reinforced with the release of the latest manufacturing and services PMI numbers for December for Germany, France and the Eurozone.
French manufacturing and services PMI numbers are expected to show a small improvement from 44.5 and 45.8 to 44.9 and 46 respectively, still worryingly weak, and pointing to a Q4 contraction. German figures are expected to be slightly better with manufacturing expected to improve from 46.8 to 47.3, while services is expected to show a 50 reading, pointing to stagnation.The broader Eurozone measures are also expected to show moderate improvement to 46.6 for manufacturing and 47 for services.
In Spain the decline in house prices is expected to continue on a quarterly basis heaping further pressure on bad loans in the Spanish banking sector, despite the setting up of the bad bank earlier this month. Q2 house prices showed a decline of 3.3%, translating to an annual decline of 14.4%. This isn’t expected to have improved over the latest quarter, Q3.
Late yesterday evening S&P joined Fitch and Moody’s on putting UK on a negative outlook for its triple “A” rating, suggesting that we will see a ratings cut sooner rather than later, and probably by Q2 of next year. The pound slipped initially, particularly against the euro, however the agencies aren’t really telling us anything we don’t already know and the reaction is likely to be fairly muted as far as the markets are concerned.
Putting the tortuous negotiations about the fiscal cliff to one side for a moment in the US the latest industrial production figures for November will be of particular interest with respect to the impact Hurricane Sandy had on activity last month. Expectations are for a rise of 0.2%, a slight recovery from October’s -0.4%.
EURUSD – the larger resistance at 1.3175 remains the key level, and obstacle to a further move towards 1.3400. It needs a move back below 1.3020 to retarget the key support at the 1.2880/90 level which is the 50% retracement of the up move from 1.2660 to last week’s high at 1.3125. A move below the 1.2880 level opens up a move back towards the trend line support from the 1.2050 low, which now sits at 1.2825, and the 200 day MA at 1.2790.
GBPUSD – the 1.6180 level and November highs remains the key resistance blocking a move towards 1.6300. Trend line support from the 1.5830 lows comes in at 1.6060, while the key support remains at 1.5980. Only a break through here targets major trend line support at 1.5875 from the 1.5270 lows, the 200 day MA at 1.5870 as well as 1.5660.
EURGBP – 0.8130 has held for now but the wider resistance lies at 0.8165, the November highs, a break of which targets 0.8300. The 0.8080 level needs to hold for this move to unfold otherwise we’re probably heading back towards 0.8030 and trend line support from the July lows at 0.7755 which remains the key level for the uptrend to continue.
USDJPY – we’re almost at the 84.00 level and the highs this year at 84.16. A break above here targets the 85.55 2011 highs. The previous resistance at 82.70/80 should now act as support, but if we do drop below this then there remains solid support at 81.70. If we break below 81.60 then the potential is there for a move towards 80.50, and even 79.90.
Fiscal cliff anxiety ratchets up a few notches with each passing day
By Tim Waterer (Senior Trader, CMC Markets)
As each day comes and goes without a deal struck in Washington, investor anxiety over a potential fiscal freefall ratches up a few extra notches. Traders are still rationalising that even after the expected political posturing on the issue, sanity will prevail and a deal will indeed be inked at the last minute. As such, markets have been doing the opposite of what has been commonplace in recent years by actually pricing in the best case scenario eventuating which is cliff-avoidance.
Financial markets pricing in best case scenario’s, even with so much uncertainty prevailing, is very much uncharacteristic in the post-GFC world. But while the situation of financial markets having adopted an optimistic outlook makes for a pleasant change, it also set’s us up for one almighty fall if the fiscal cliff scenario makes the transition from remote possibility to cold hard reality. Asian markets started the day on a bit of a downer after the move lower by Wall Street, however the release of the latest Chinese PMI reading served to ‘right the ship’ which had markets moving higher, albeit at a cautious pace.
The Australian Dollar had been looking in some danger of falling below 1.05 today until the PMI reading saw the currency erase earlier losses. Had we witnessed Chinese PMI below the 50 level the AUD would almost certainly have been eyeing a return to around the 1.0480 level today. But instead, it bounced off its session lows of 1.0510 to move back in the region of 1.0530. Heading into the coming weeks any positive developments on the fiscal cliff discussions would be positive for the high yielding AUD, but the vice versa situation applies equally.
The Australian sharemarket was mainly just going through the motions today, with the lower lead-in from Wall Street countered by some pleasing Chinese data. This combined to produce a fairly monotonous performance from the local bourse with traders happy to sit tight as we see how the US budgets talks evolve over coming days.