M. Hewson: Madrid tiene i mercati sotto pressione
Forex Morning Comments a cura di Michael Hewson (Senior Market Analyst) e Tim Waterer (Seniort Trader) di CMC Markets
In tutto il mondo gli operatori finanziari potrebbero incorrere oggi in un attacco ansiogeno a causa dei timori che la Spagna si stia per incanalare in un disastro finanziario: la richiesta di aiuto della regione di Valencia potrebbe presto aprire la strada ad altre simili da parte delle diciassette autonomie iberiche con effetti catastrofici sui bilanci del governo che potrebbe essere in condizioni di chiedere in prima persona un aiuto alle autorità internazionali. La rapida risalita degli spread sopra la soglia psicologica del 7% sta portando i trader a compiere un’inversione a U e a tornare sugli asset difensivi, in primis sul Dollaro Usa. L’Eurodollaro si dirige verso 1,2050 avvicinandosi così al target di 1,1880; probabile prosieguo di trading range laterale per il “cable” con una tendenza a registrare ulteriori perdite verso i minimi del 2008 a 0,7695. Sul Dollaro Yen il rischio è quello di uno scivolo verso 78,20 prima e 77,60 poi. Anche il Dollaro australiano rischia di inanellare ulteriori perdite qualora il dato cinese sul prodotto manifatturiero sia deludente e il rischio è quello di tornare a 1,0220. Si prevede un’apertura negativa per le principali borse europee.
Spain fears set to keep markets on the defensive
(Comments below have been provided by CMC Markets Senior Market Analyst Michael Hewson)
Fears about the solvency of Spain emerged with a vengeance on Friday after the Spanish government cut its growth forecast for 2013 to -0.5%, at around the same time one of Spain’s indebted regions said it would be putting in a request for financial aid. With voters pushing back on the government’s austerity plans, the room for manoeuvre of the Spanish government is diminishing by the day as the economy continues to deteriorate under a combination of rising unemployment and rising bad loans.
The fear now is that Valencia’s aid request is more than likely to open the floodgates for similar requests from the other 17 heavily indebted Spanish regions. Already speculation is increasing that Catalonia, or any one of a number of regions will be next. When that happens it will be pretty much nailed on that the Spanish government will then eventually need a bailout itself, stretching the funds of the EFSF to its limits.
This is why Spanish bond yields spiked sharply across the curve on Friday with 5 and 10 year yields pushing above 7%, while 2 year yields went above 5.5%, to completely unsustainable levels in the long term.
With the troika set to return to Greece tomorrow, there are reports that patience within Europe and the IMF is starting to wear thin and these reports suggest that unless the Greek government is able to deliver on its budget pledges and finalize its 2013 and 2014 austerity plans, then no further aid would be forthcoming, in which case Greece could default and leave the euro.
There appears to be a growing mood, unthinkable a year ago, that a Greece exit could well be managed, though given the problems in Spain right now a Greek exit is more than likely to start a slippery slope, towards fragmentation.
ECB President Mario Draghi certainly appears fairly sanguine about recent events, remarking at the weekend that the euro is “irreversible” and not in any danger. When a central banker talks in such terms you can be sure that the opposite is true, otherwise why say it.
In any case it is the reluctance of further action on the ECB’s part that is encouraging speculation on just such an outcome.
Draghi’s comments that it is not the ECB’s role to resolve EU government’s financial problems also blew a hole in the IMF’s strongly worded report last week that the bank should intervene to stem the debt contagion blowing like a firestorm through Europe’s bond markets. This week’s latest European manufacturing and services PMI data from Germany, France and the rest of Europe are expected to reinforce the grim picture for economic growth across Europe.
Growth prospects aren’t expected to be much better elsewhere either this week, with preliminary Q2 numbers from the UK and the US later this week. The UK is expected to show a contraction for the third quarter in a row with a -0.2% reading, while US growth is expected to slip back to 1.5%, from 1.9%.
EURUSD – Friday’s break below the triangular support line at 1.2225 saw the single currency move sharply lower and is likely to take it towards the 1.2050 level, thus bringing us closer to the longer term target at 1.1880 and the 2010 post Greek bailout lows. Pullbacks should now be limited to the highs last week just above 1.2300. Only a break above this level targets 1.2520 the 55 day MA.
GBPUSD – last week’s failure just below the 200 day MA as well as Friday’s bearish daily candle reinforces the case for the recent range to continues, but with a slight negative bias. To target a move towards 1.5910 we would need to see a close above the 200 day MA. Pullbacks in the cable can now expect to find support at the 1.5540 area, as well as this month’s low at 1.5395. Only a move below 1.5250 signals a risk of a return to the July 2010 lows at 1.4950.
EURGBP – the woes of Europe saw the euro hit the 61.8% retracement of the entire up move from 0.6535 and 2007 lows, to the 2008 highs at 0.9805 at 0.7784 on Friday. The subsequent break below here suggests we could well see further weakness towards the October 2008 lows at 0.7695. If that breaks there’s pretty much fresh air between that and the 2008 lows at 0.7390. Resistance can be found at 0.7830, which provoked a number of rebounds in the early part of last week. The next resistance can be found at the highs this week at 0.7880.
USDJPY – while below the 79.30 level the risk of a move towards 78.20 initially, as well as the May low at 77.60 seems the most likely outcome. This level is also the base of the weekly cloud. A move above the 79.30 level brings the 80.00 level back into play and then by definition the main resistance at the top of the weekly cloud at 80.45.
Traders Turn Decidedly Defensive
(Comments below have been provided by CMC Markets Senior Trader Tim Waterer)
Spanish yields rising over the psychological 7% level has seen risk-assets take a turn for the worse, with traders turning decidedly defensive now that European debt issues have again dimmed the mood. Given the latest flare-up in Spanish yields and renewed alarm over the country’s ability to service its debt, the Euro looks to be living on borrowed time trading above 1.20 against the US Dollar in light of what appears to be further trouble down the road.
As traders are again preoccupied with Spanish woes, the US Dollar is again the prime recipient of safe haven flows in the currency market. With the HSBC Chinese Manufacturing PMI reading due early in the week, a poor result here could exacerbate the selling of higher yielding currencies. While the AUD faces a potential hurdle in the Chinese data, domestic focus will be squarely on Wednesday’s CPI print. How the inflation number reads could effectively provide us with the RBA’s August rate decision a few weeks in advance, particularly if the data comes in a good distance either side of the 0.6% forecast.
Today’s PPI data came in on the high side (0.5% vs 0.3% forecast) however this had little impact on the AUD which was already tracking lower amid slumping Asian equity bourses. The AUDUSD rate has fallen over half a cent today with market attention firmly focused on European debt. The currency has found some support around the 1.03 level, however if we have another night of heavy selling on US markets a decline to 1.0220 is likely.
It was a tale of woe for the Australian sharemarket to start the week, with a resurfacing of Eurozone fears derailing our resource stocks in particular. Mining giants BHP and RIO bore the brunt of the selling, with traders turning morose over the global growth outlook in light of the situation in Spain. Traders around the globe appear to be suffering an all too familiar ‘anxiety attack’ on fears that Spain is on course for a financial calamity, and this sentiment was played out on the ASX200 today.