Market Commentary: l’eurodollaro potrebbe tornare a 1,3490
Ci sono tutti i presupposti per una seduta positiva sull’onda dell’ottimismo suscitato dall’avvicinamento delle parti man mano che si procede verso la deadline entro la quale andrà risolto il problema del Fiscal Cliff americano. Per quanto i dettagli dell’eventuale accordo si intravedano appena, i mercati sono sostenuti dal convincimento che un compromesso sia ormai vicino. Ulteriori segnali incoraggianti si possono poi cogliere dalla riduzione degli spread dei titoli europei periferici, dall’upgrade della Grecia da parte di S&P e dal ritorno degli investimenti sui debiti italiano e spagnolo che stanno causando un contemporaneo smobilizzo di fondi da Gilt e Bund. Per quanto riguarda i titoli inglesi, il rialzo dei rendimenti verso la soglia del 2% riflette il ritorno di timori inflazionistici che potrebbero sostenere momentaneamente le quotazioni della Sterlina (in corsa per ritestare i massimi di novembre a 1,6310 contro USD). Si rafforza il rally dell’Eurodollaro che, superati 1,3250, potrebbe ora tornare a 1,3490. La moneta unica rimane invece compressa in un canale compreso tra 0,8100 e 0,8165 nei confronti con la Sterlina mentre il Dollaro Yen continua ad essere lanciato verso 85,55 i livelli massimi registrati nel 2011. Qualche difficoltà per il Dollaro Australiano, appesantito dallo storno dell’oro e dal minore tasso di crescita cinese, le cui quotazioni non sono in linea con il ritrovato appetito per i risky asset, per quanto non si escluda un avvicinamento a 1,06 qualora le condizioni di mercato dovessero indicare ancora “bello stabile”.
Greece upgrade sends euro to 7 month highs
By Michael Hewson (Senior Market Analyst at CMC Markets UK)
European equity markets once again look set to open higher this morning as political leaders in Washington discuss support for a framework of a deal which will in all likelihood require significant compromise on both sides as the end of year deadline swings into view. The details still remain sketchy but markets appear encouraged that some form of deal could well be forthcoming.
Benign peripheral bond markets, along with an upgrade for Greece from ratings agency Standard and Poor’s from “selective default” have encouraged a much less risk averse environment over the past two to three days in Europe’s markets. Investors have been putting money back into Italian and Spanish bond markets and pulling money out of German and UK bond markets, narrowing spread differentials quite sharply.
The single currency has hit levels last seen nearly 8 months ago, before the Greek elections, as investors venture out to keep German and French equity markets near to their highest levels this year. Even the Spanish IBEX has recovered close to levels last seen in mid-September despite widespread protests over current austerity measures and a continued deterioration in distressed loans to yet another record high, as optimism wins out over deteriorating economic data.
Today’s latest German IFO numbers could well offer a further boost to this prevailing mood after last week’s ZEW positive surprise. Expectations are for a slight rise in the December business climate from 101.4 to 102.00. As similarly positive number to last week’s ZEW figure will confound and confuse given this month’s sharp downgrade of German economic growth for 2013 to 0.4%, by the German Bundesbank, while the German government also suggested yesterday that they too would be adjusting down their forecasts for 2013.
This morning’s release of the latest Bank of England minutes will make for particularly interesting reading to see whether or not David Miles stuck to his view that more QE was still needed over and above the FLS scheme liquidity.
The minutes should also be of particular interest in the context of inflation expectations after yesterday’s latest CPI numbers suggested that inflation could well continue to remain high for quite some time to come, due to rising energy and food prices. Any concerns that suggest that further easing is likely to be pushed further out into 2013 are likely to see the pound gain further, particularly against the US dollar.
The expectation is that this stickiness in inflation will prevent the Bank of England from adding to its asset purchase program in the New Year, an expectation that has been reflected in UK gilt prices which have dropped sharply pushing yields back near to the 2% level.
EURUSD – we got the move higher we warned about yesterday with 1.3250 the initial resistance. The break higher now suggests further gains towards 1.3490 and the 200 week MA. The 1.3170 area should now act as support on any dips back below 1.3200. A move back below 1.3170 suggests a deeper pullback towards 1.3020 and then 1.2880. Only 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 pound remains on course to retest the November highs at 1.6310 which in turn could well see a move back towards the 1.6500 level. Support remains at 1.6180 which had acted as resistance on the way up. Trend line support from the 1.5830 lows now comes in at 1.6090, while the key support remains at 1.5980. Only a break through here targets major trend line support at 1.5885 from the 1.5270 lows, the 200 day MA at 1.5880 as well as 1.5660.
EURGBP – stuck in a range here between November‘s high at 0.8165 which continues to cap further advances; while support at 0.8100 serves to limit the downside. The lack of pull back suggests a move to the 0.8300 level could be in the works. A break below the 0.8080 level suggests a move back towards 0.8040 and trend line support from the July lows at 0.7755 which remains the key level for the uptrend to continue.
USDJPY – we continue to remain on course for the 2011 highs at 85.55. Last week’s close at 83.55 should act as some form of support, though we could well slip back as far as the breakout level at 82.80. 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.
Bridging Political Gap Sends Markets North
By Tim Waterer (Senior Trader, CMC Markets)
Signs of the political gap bridging between Republicans and Democrats is all the market needed to remain in festive mode on the approach to year end, with Obama and Boehner seemingly moving closer towards middle ground on the key parameters. In the immediate aftermath of the November US election, the gap between the two parties appeared immense as the mid November market slump attests.
However, the divide between the two parties which started life as an abyss now appears to be just a hop, skip and jump away from a resolution being reached if recent market trajectory is anything to go by. Though the proof will be in the pudding and until a deal is struck, the risk of unwinding the December gains early in the New Year remains a threat.
Despite it being a very productive last few days for ‘risk’ assets, the AUD appears to have missed the boat with the currency somewhat surprisingly losing ground despite advances by global equities and the Euro against a broadly weaker Greenback. A falling gold price as safe haven trades are unwound, as well as a more restrained growth target by China has capped some buying enthusiasm for the AUD.
However part of the reason the AUD has underperformed other currencies (like the Euro which has hit 1.3250) is that the Aussie was already ‘ahead of the curve’ in the sense that it had less room to move on the upside compared to other currencies. So, while the AUD may have broken from character by falling despite runs higher in US equities, I would expect the AUD to still be making a push for 1.06 if general market appetite for risk remains strong.
The climb north continued for Australian equities with the ASX200 again pushing through the 4600 level thanks to a rosier looking global picture. Gold stocks lagged after the sell-off in the precious metal price overnight however generally it was yet another positive showing in what has been a prosperous December. The Australian sharemarket has had momentum on its side this month with the local index heading to the year-end finish line with a decidedly wet sail thanks to an improving European and US outlook.