Tuesday, November 24, 2009

MORNING FX
BRIEFING
Return of the Tokyo market (following Monday's holiday) prompted strong selling of yen crosses, at the open and through the Tokyo fix, which in turn added to the corrective pullbacks in euro-dollar, cable and the Aussie. Gold initially eased $7 to $1158, bouncing back to $1166, currently around $1164 and remaining buoyed. Repatriation, profit taking seen as the main driver, with concern toward Greece still bubbling away in the background, as well as reports in the FAZ that WestLB requires further cash injections, seen providing a counter to recent risk on tone, and also adding negative weight on the euro.

FOMC Minutes after the European close to be the day's highlight, though most expect no major surprises from the recent line. Germany GDP and Ifo data, BOE MPC at the TSC, EZ Industrial Orders the morning's highlights, with US GDP the early afternoon focus. Sterling outpaced the euro-dollar pullback in Asia with traders suggesting that the MPC could affirm the need for a weak pound for economic rebalancing which could again weigh back on the pound.

EURO
Euro-dollar opened Asia around $1.4960 with initial demand lifting the rate up to session highs of $1.4972 ahead of the Tokyo open. The return of Tokyo markets, following Monday's holiday, saw the centre active sellers of yen crosses into the open and through the Tokyo fix. The weight of selling took the rate through the NY base at $1.4957, with triggered stops on the break of $1.4950 providing the weight to take it on to an initial low of $1.4937. Recovery attempts were capped by sell interest between $1.4955/60 before rate pushed down to mark extended session lows at $1.4928.

Further sell interest into early Europe takes rate down to $1.4911 at writing. Support seen placed toward $1.4900, a break here to allow for a deeper move toward $1,4875/70 ahead of $1.4850/40. Resistance now seen toward $1.4930/35, a break here to open a move back toward $1.4965/75 ahead of $1.5000.

YEN
After edging up to highs at Y89.20 in the NY session, dollar-yen eased back to close around Y89.00, as euro-yen slipped back to Y133.10, failing to break through the Cloud top at Y133.88. Return of the Tokyo market Tuesday following yesterday's holiday found yen crosses under pressure from the open, further selling coming through at the fix, taking euro-yen back under Y132.80 and dollar-yen to Y88.80. Both pairs consolidated into the afternoon session, before another round of selling as the Nikkei ended at a fresh four-month low. Euro-yen dropped to Y132.45 as dollar-yen moved to Y88.73, with early European dealing seeing lows extended further.

Models and real-money accounts said to be the yen buyers, while semi-official demand is rumoured to come in around Y88.60/50 this morning, importers and investors also looking to buy the dip. Stops noted under Y88.50 and Y88.10, ahead of barrier interest at Y88.00. 200-day moving average back under pressure at Y132.29, a close below still eyed for the first time since May 2009. Trendline support from the October lows also seen cushioning at Y131.93.


CABLE
Opened in Asia around $1.6610 and initially edged up to mark session highs at $1.6620, as early market moved into risk after the positive close on Wall Street. A returning Tokyo market were strong sellers of yen crosses, the weight of which weighed back on cable to take the rate down to an initial low of $1.6560. Rate recovered to $1.6587 before turning lower again, extending the overnight base to $1.6550. Recovery to $1.6575 proved short lived as early Europe added weight. Rate broke below $1.6550, extending lows to $1.6519, with rate currently trading around $1.6524. Support seen placed toward $1.6500 ($1.6505 76.4% $1.6460/1.6649), a break here to open a deeper move toward $1.6460/50. BOE King at the TSC today with some expectation that he will again refer to a weak pound supporting UK growth. Resistance seen at $1.6550, more at $1.6570/80.

OPTIONS AND MORE
FX Option expiries for today's 1500GMT cut

* Euro-dollar; $1.4900, $1.4980, $1.5000, $1.5050
* Dollar-yen; Y88.00, Y88.50(lge), Y89.50, Y90.00
* Cable; $1.6790
* Euro-Swiss; Chf1.5150
* Aussie; $0.9300
* Dollar-Canada; C$1.0750


EUROPEAN STOCKS: European equity bourses are seen opening lower Tuesday, with spreadbetters calling the FTSE-100 down 33pts, CAC-40 down 32pts and Xetra-DAX down 45pts. The banking sector is in focus this morning after news Lloyds Banking Group (LLOY) will be undergoing a Stg13.5bln rights issue as part of its Stg22.5bln capital raising efforts, with new shares offered at 36p. The firm also managed to raise Stg8.5bln in new debt yesterday, most of which can be converted to equity if the banks finances come under pressure. On the macro front, German IFO at 0900GMT, EMU Industrial Orders at 1000GMT, US GDP data at 1330GMT and the Case-Shiller data at 1400GMT, will all be watched for direction today.

DAILY CALENDAR
The European day starts a full calendar session at 0700GMT, with the release of German detailed Q3 data, followed by French housing starts/permits and French November manufacturing sentiment at 0745GMT.

French data continues at 0750GMT, with the release of French October consumer spending. At 0800GMT, Spain Oct PPI data is released.

At 0900GMT, Germany Nov IFO business sentiment is released, the main focus for European players in the morning session

In the UK, at 0930GMT, Q3 preliminary business investment data is released, along with the October BBA Loans For House Purchase data.

At 0945GMT, Bank of England Gov. Mervyn King is at the House of Commons Treasury Committee, giving evidence on the November inflation reports. BOE MPC Members Paul Tucker, Paul Fisher, Adam Posen and Andrew Sentance also to attend.

Additionally, BOE Gov. King and MPC Member Andrew Sentance issue their Annual Report.

At the same time, German Chancellor Angela Merkel gives a speech at the BDA conference, in Berlin. AT 1000GMT, EMU Sep industrial new orders data is released, followed at 1230GMT by German Economics Minister Rainer Bruederle speaking in Berlin

A full US calendar gets underway at 1245GMT, when the 21-Nov week ICSC-Goldman Store Sales data is released.

At 1330GMT, US third quarter revised GDP, Chain Price Index data are released. Third quarter GDP is expected to be revised down to a 2.8% pace in the second estimate. The key factors are expected to be a wider trade gap and more inventory drawdown, as well as slower PCE growth than previously expected. The chain-price index is expected to be unrevised at +0.8%.

Back in Europe, at 1400GMT, the BNB Nov business sentiment is released.

Further evidence of the state of the US housing market is released at 1400GMT, when the Sept 09 S&P/Case-Shiller Home Price Index and at 1500GMT, when the Sept FHFA Home Price Index is out.

Further data is released at 1500GMT, with the November Consumer Confidence data and the Richmond Fed Manufacturing Index. Consumer confidence is expected to fall to a reading of 47.0 in November after backing up to a 47.7 reading in October.

Also at 1500GMT, FDIC Chair Sheila Bair holds a press briefing on the Q3 bank and thrift earnings in Washington.

Back in the UK, at 1535GMT, BOE Gov. King gives further testimony to Parliament, this time to the House Of Lords Economic Affairs

At 1730GMT, SNB President Jean-Pierre Roth holds speech at the International Center for Monetary and Banking Studies, in Geneva

Big release for the bond markets at 1900GMT in the US, when the latest FOMC Meeting Minutes are released. Last releases data is at 2200GMT, when the 22 Nov week ABC News Survey of confidence is released.

MORNING FX
BRIEFING
Tokyo holiday Monday (Labour Thanksgiving), with the US out Thursday for Thanksgiving (early close Wednesday/half staff Friday) made for a relatively subdued Asian session. A continued paring back of risk into early Asia, with system accounts showing decent demand for dollars, pressed euro-dollar to lows of $1.4833, cable to $1.6474 and Aussie to $$0.9112. This opening scenario was quickly reversed as market reacted to the opening bullish tone in gold, the price spiking to $1164.75 with traders linking the move to $1200 Comex calls that roll off today. Euro-dollar rallied back to $1.4948, cable to $1.6552, with Aussie edging back up to $0.9206. Yen was basically sidelined due to the holiday.

Risk remains favoured into early Europe, aided by the positive tone in Asian equities, and boosted by weekend comments from Fed Bullard on wanting to see an extension of the Fed's MBS buy programme, as well as Fed Fisher not surprised if Fed keeps rates near zero until at least the middle of 2010. EZ flash manufacturing PMI's, Canada retail sales, US home sales and US 2yr Tsy auction the day's highlights.

EURO
Euro-dollar opened in Asia around $1.4860 and was pressed to a session low of $1.4833 as system accounts showed decent demand for dollars, as well as market reacting to a Telegraph article noting concerns about Greek debt rising CDS premiums). This early move was quickly reversed as gold opened with a strong bull tone, the price spiking to $1164.75, with traders linking the move to physical need ahead of $1200 Comex calls expiring today (2.5mln ozs in open market mentioned). Euro-dollar rallied to a session high of $1.4948 with ongoing demand into early Europe lifting it on to $1.4959 ($1.4966 76.4% $1.5017/1.4800). A break above this area to open a move on toward $1.4990/00 ($1.4990 76.4% $1.5049/1.4800). Above here and rate can extend toward $1.5015/20 ahead of stronger interest in the $1.5050/65 area. Support $1.4920, more toward $1.4900.


YEN
Traders reported light activity in the yen thanks to the Tokyo holiday, with attention this week moving to CPI data for October, anticipated to be the lowest levels since records began in 1971. Attention also focused on unemployment data Thursday and the release of BoJ minutes Wednesday. Dollar-yen traded in a tight Y88.80/89.03 range, while traders did report euro-yen buying coming from a model fund, lifting the cross off early lows at Y131.85 as comments from Fed's Bullard aided risk positions.


CABLE
Closed in NY Friday at $1.6503, off session lows of $1.6460. Early system demand for dollars acted to take rate back under the figure and on to session lows of $1.6474. The spike up in gold (talk of large $1200 expiring calls on Comex) reversed the early risk off tone and allowed rate to rally back to $1.6537. Rate then settled between $1.6500/35 during the Asia afternoon before picking up a late bid tone that extended the recovery to $1.6552. Rate dipped to $1.6530 into the European session before again picking up fresh demand, the rate pushing on to $1.6573 ($1.6568 50% $1.6676/1.6460) as risk given additional boost from gold, as it continues to squeeze higher. Offers seen placed toward $1.6580, a break to open a move back toward $1.6600, where minor sell interest so far noted. Above here and stronger interest seen at $1.6625 (76.4%). Support noted at $1.6520, with further interest extending toward $1.6500. Further demand noted from $1.6475 through to $1.6460.


OPTIONS AND MORE
FX Option expiries for today's 1500GMT cut

* Euro-dollar; $1.4900, $1.4875, $1.4800
* Dollar-yen; Y89.00, Y88.50, Y87.45, Y90.00
* Dollar-Canada; C$1.0700


EUROPEAN STOCKS: European equity bourses are seen opening higher this morning, with spreadbetters calling the FTSE-100 up 31pts, CAC-40 up 26pts and Xetra-DAX up 46pts. The mining sector is once again being eyed for strength today as gold hits new record highs, and from the macro front, the US Existing Home Sales at 1500GMT is the only release of note. With this, "equity markets are a bit doubting of everything at the moment and a figure below expectations will be badly received" suggests Daniel Roy, equity strategist at Newedge, also noting a figure pushing the gauge close to 6mln will be positively received.

DAILY CALENDAR
Monday's European data starts at 0730GMT, when the raft of national service and manufacturing PMI flash data are released. First up is the German data, followed at 0757 with the release of the French data and the overall EMU flash releases at 0800GMT.

Central bank speakers start at 0815GMT,when ECB Governing Council member Miguel Fernandez Ordonez is set to appear before the Committee on Budgetary Affairs of the Senate, in Madrid

At 1245GMT, ECB President Jean-Claude Trichet speaks at the Association de Mercados Financieros'annual convention, in Madrid

Ahead of that, the Canadian September 2009 Retail trade data is released at 1230GMT.

US data starts at 1430GMT, with the release of the MNI Capital Goods Index for the Nov 20 week.

At 1500GMT, Oct 09 Existing Home Sales data from the National Association of Realtors data are released. Existing home sales are expected to rise to a 5.70 million annual rate in October after jumping 9.4% in September. The government extended the tax credit for first time home buyers, but not before October and November sales likely got a boost from last minute purchases.

At 1800GMT, the US Treasury starts the latest leg of financing, with the auction of $44.0 billion in 2-year notes. The sale schedule is bumped up a day from the norm, due to Thursday's Thanksgiving holiday.

Monday, November 23, 2009

MORNING FX
BRIEFING
Cross yen sales during the Asian session dictated moves, with sales of Aussie-yen and Kiwi-yen leading. The dollar withstood the major part of yen strengthening, with trade in dollar-yen once again contained within a relatively tight range just above Y89.00 (Y89.03/43). This in turn allowed the dollar to track yen gains vs majors, euro-dollar slipping from $1.4966 to $1.4903, cable extending Wednesday afternoon losses to $1.6686 (NY low $1.6715), with Aussie and Kiwi feeling the main brunt of cross yen sales, but with Aussie-dollar meeting support ahead of $0.9220 left Kiwi as the main underperformer, Kiwi-dollar dropping 100 points to $0.7357, in turn taking Aussie-Kiwi above NZ$1.25.

Risk positions continue to be pared with some already talking of end month covering, prompted by next week's US Thanksgiving holiday. Some concern has been voiced over the MUFG capital raising measures in Japan, with talk that more shares than previously announced could be on offer. Soc Gen has issued customers a warning of possible 'global economic collapse' offering advice for best investments.

EURO
Euro-dollar opened Asia around $1.4962, off late NY rally highs of $1.4992. Rate initially edged up to post session highs at $1.4966 before coming under pressure as yen crosses were sold out of Tokyo. Additional talk of Asian sovereign sales added to the weight to take rate down to early lows of $1.4919 with a second wave of selling triggering stops through $1.4910 before rate based at $1.4903. Reported demand placed ahead of $1.4900 proved strong enough to cushion the move with rate recovering back to $1.4925.

Euro-dollar currently trades around $1.4915, finding interim support above $1.4910. Stops noted on a break of $1.4900, a break of which to open a deeper move toward $1.4880 ahead of $1.4860/50. Through here and option linked demand again expected to emerge ahead of $1.4800 ($1.48/1.51 DNT option structure in play, rolls off Friday), though traders have noted that recent defence, when rate stretched down to $1.4807, was not seen as strong as previously seen. Offers seen placed at $1.4965/70, stronger between $1.4990/1.5000. Stops noted above $1.5010, though more offers $1.5015/20, $1.5050/65.

RES 4: $1.5230 2% moving average envelope
RES 3: $1.5163/89 76.4% of decline from July 2008 high, Res line 3 June
RES 2: $1.5090 Current Bollinger band top
RES 1: $1.5047/64 High 11 Nov, Double-day high 23, 26 October

SUP 1: $1.4885 21-day moving average
SUP 2: $1.4788 61.8% retracement of $1.4628 rally, 1% MAE
SUP 3: $1.4742 Support line 17 Aug
SUP 4: $1.4628/80 Low 3 Nov, Base of Bollinger band


YEN
Dollar-yen closed in NY mid-range around Y89.30, with euro-yen ending in the Y133.60 area. Traders said a US investment bank was the noted seller prior to the Tokyo open Thursday, with Japanese banks then selling through Y89.25 as the rate dropped down to initial lows around Y89.10. Talk also that a large Y89.50 digital option rolled off at the Tokyo cut, keeping the range relatively tight. Cross yen sales were noted in Asia as investors took profit on risk positions and the Nikkei slipped to four-month lows, euro-yen dropping from early highs at Y133.70 down to initial lows around the Y133.00 area.

Lows were extended into the Asian afternoon as dollar-yen dropped to Y89.03 and euro-yen slipped to Y132.80, with early European dealing seeing another leg to the downside as dollar-yen drops below Y89.00 and the cross slips beneath Y132.70. Bids seen into Y132.40, while key support is still the 200-day moving average at Y132.06 and the Cloud base at Y131.85. Dollar-yen bids are placed into Y88.75/70 with stops below. Techs also note trendline support from the October lows coming in at Y88.80.

RES 4: Y92.32/53 Failure highs 27 Oct, 21 Sep, 100-day moving average
RES 3: Y91.31 High 4 Nov
RES 2: Y90.35/55 21, 55-day moving average
RES 1: Y89.90 Base of the Ichimoku cloud

SUP 1: Y88.50/73 Base of Bollinger band, Low 17 Nov
SUP 2: Y88.02/24 Major low 7 Oct, Low 25 Sep
SUP 3: Y87.81 100% projection of the 21 Sep pullback from 27 Oct high
SUP 4: Y87.12 Major lows Dec/Jan


CABLE
Opened Asia around $1.6745, posted session highs at $1.6746 before turning lower with sales of cross yen leading the move, easing in tandem with euro-dollar as euro-sterling consolidated Wednesday's late recovery gains to stg0.8950 between stg0.8930/45. Cable traded to a low of $1.6686 before meeting decent demand, with main bids reported in place to $1.6680, more toward $1.6650 ($1.6654 61.8% $1.6515/1.6879). A break here to open a deeper move toward $1.6600 (76.4%). Rate recovered off lows, with trade then contained for a while between $1.6690/10 before extending correction to $1.6725 ahead of the European open. Rate dipped back to $1.6695 before settling between $1.6705/20. Offers seen placed between $1.6720/25, a break to open a move toward $1.6750/55, with stops placed on a break of $1.6760.

Gradual pull back over night from highs of 1.6745 ish Stops sitting in the sub-1.6710-15 region were triggered in the process, taking cable down to 1.6686, as I write we break the 1.6680 level, of reasonable note, this is the level at which HSBC had moved their stop up to based on a med term long recommendation, no follow through as yet

RES 4: $1.7240 100% projection of first October upwave
RES 3: $1.7044/52 High 5 August, November 2005 low
RES 2: $1.6930 Current top of the daily Bollinger band
RES 1: $1.6879 High 26 Nov

SUP 1: $1.6750 5-day moving average
SUP 2: $1.6663 Support line 13 October
SUP 3: $1.6570 21-day moving average
SUP 4: $1.6515 Low 12 Nov


OPTIONS AND MORE
FX Option expiries for today's 1500GMT cut

* Euro-dollar; $1.4875, $1.4900, $1.4920, $1.4935, $1.4950, $1.4960, $1.5000
* Dollar-yen; Y89.00, Y88.00
* Cable; $1.6700, $1.6900
* Euro-Swiss; Chf1.5150
* Aussie; $0.9200, $0.9400/10
* Aussie-Kiwi; NZ$1.2500


EUROPEAN STOCKS: European equity bourses are seen open mixed Thursday, with spreadbetters calling the FTSE-100 flat, CAC-40 down 3pts and the Xetra-DAX down 8pts. Earnings results from National Grid (NG.) and Infineon (IFX) are watched for movement in Europe this morning, with Dell (DELL) and Gap (GPS) both releasing results in the US later. On the macro front, UK Retail, Mortgage Lending and Money Supply data all at 0930GMT and the OECD Economic Outlook at 1000GMT will be eyed for direction initially today, with the US Phila Fed and US Leading Indicator at 1500GMT, taking focus later in the session.

DAILY CALENDAR
UK data starts the European calendar Thursday, with a string of releases at 0930GMT. The data includes the October retail sales data, the October public finance data, M4 money supply, the Bank of England trends in lending survey and the October CML mortgage lending data.

European events starts at 1000GMT, with the release of the OECD Economic Outlook for the major world economies. At 1100GMT, the Bundesbsank Nov monthly report is out.

The US calendar starts at 1330GMT, with US 14-Nov Jobless Claims. Jobless claims are expected to rise only 2,000 to 504,000 in the November 14 employment survey week, compared with the 531,000 level in the October 17 employment survey week. Both initial and continuing claims have trended downward over the last few months.

There is also a raft of Canadian data at 1330GMT, with the release of the Sep09 Intl sec transaction, Oct-09 Leading indicator and the Sep09 Wholesale sales data.

Back in the US, at 1500GMT, Treasury Secretary Timothy Geithner testifies before the Joint Economic Committee on financial reform in Washington.

More US data is released at 1500GMT, with Philly Fed and Leading Indicators. The Philadelphia Fed index is forecast to rise slight to a reading of 12.0 in November after falling to 11.5 in October.

The leading indicators index is expected to rise 0.4% in October, the seventh straight increase. Positive contributions from a steep yield curve, falling jobless claims and rising stock prices are expected to be offset by falling consumer expectations.

At 1530GMT, the US 13-Nov EIA Natural Gas Stocks data is released.

At 1600GMT, ECB President Jean-Claude Trichet gives a speech on "Is there still a paradigm for monetary policy today?", in Paris.

Later, at 2145GMT, the Dallas Federal Reserve Bank President Richard Fisher delivers closing address to the Cato Institute's annual monetary policy conference in Washington.

The day ends at 2130GMT, when the US Nov M2 Money Supply data is released

Wednesday, November 18, 2009

18 Nivember 2009

MORNING FX
BRIEFING
A fairly quiet Asian session with most reports suggesting that what activity there was led by moves in gold. The yellow metal managed to post fresh highs at $1144.70, the move giving euro-dollar and cable an early lift, the former trading up to $1.4900, the latter to $1.6825. Reversal in gold back to $1136.50 (traders suggest stops under $1136) allowed both pairs to ease back, the failure to trigger reported stops above $1.4900 prompting spec longs to cover back. One trader noted that euro-dollar trade was contained by euro-yen sales and euro-sterling demand, though flows reported to have been relatively light. Aussie saw an early session high of $0.9319 only to meet strong headwind sales out of the Tokyo fix, the rate slipping back to lows of $0.9266 before Asian sovereign demand emerged, along with custodial buying, to lift it back to $0.9290. Dollar-yen trade was contained by Y89.17/55, with euro-yen tracking euro-dollar moves. BOE Minutes the morning highlight, details of who voted for the stg25bln increase in QE the focus. Canadian and US inflation data at 1200/1330GMT

EURO
Euro-dollar opened Asia around $1.4870, having recovered off NY session lows at $1.4807 after reportedly meet strong option related demand placed ahead of the well reported $1.4800 barrier level ($1.48/1.51 dnt structure, which rolls off Friday, seen containing the rate). The early move up in gold provided risk trades with an early lift, euro-dollar edging up to $1.4890, where it met Swiss name supply, but was able to eventually stretch on to $1.4894. Failure to trigger reported stops above the figure, and with the easing back in gold (off fresh highs of $1144.70), allowed rate to slip off highs but was holding firm levels ahead of the European open. Rate currently trades around $1.4890. Offers seen placed to $1.4900 with those stops remaining in place, a break to allow for a move on toward $1.4910/15 ahead of $1.4930/35. Support seen at $1.4860/50 (Asia low $1.4858), more toward $1.4840, $1.4825 with stronger interest remaining in place on approach to $1.4800.

Euro-dollar faded ahead of the highs at $1.5060/64 and the subsequent pullback is holding around the 5 & 21-DMAs at $1.4885 and $1.4915. The 21-DMA remains in focus as the daily studies turn weaker and momentum risks a bearish cross of the zero line. Close under $1.4885 would weaken the outlook and have bears targeting the 17 August support line at $1.4742, while $1.5047/64 highs remain the focus for bulls.

RES 4: $1.5230 2% moving average envelope
RES 3: $1.5163/89 76.4% of decline from July 2008 high, Res line 3 June
RES 2: $1.5090 Current Bollinger band top
RES 1: $1.5047/64 High 11 Nov, Double-day high 23, 26 October

SUP 1: $1.4885 21-day moving average
SUP 2: $1.4788 61.8% retracement of $1.4628 rally, 1% MAE
SUP 3: $1.4742 Support line 17 Aug
SUP 4: $1.4628/80 Low 3 Nov, Base of Bollinger band


YEN
Dollar-yen and yen crosses opened with a bid tone into early Asia only for sentiment to reverse as supply emerged into the Tokyo fix. Rates drifted lower during the session as Asian equity markets traded softer, despite the positive close on Wall Street. Trade in dollar-yen was contained within a relatively tight range of Y89.09/37, though traders suggested this exaggerates real activity with most early trade contained by Y89.20/30, later between Y89.15/20. Euro-yen saw early highs of Y133.04 before slipping lower to Y132.59 with flows described as light. Dollar-yen currently trades around Y89.17, euro-yen around Y132.80. Dollar-yen bids noted between Y88.80/70 with stops below. Offers Y89.40/60 with CTA stops reported on a break of Y89.70. In euro-yen, bids seen to Y132.45 (NY low), stronger around Y132.20 ahead of Y132.00. Resistance seen at Y133.00/10, Y133.25 ahead of Y133.50/60.

Dollar-yen studies remain soft, although they are now testing oversold levels as the market tests the Y88.02 lows. Any break there will get bears focused on the major low of Y87.12, although there is also a trendline from April 1995 at Y87.58. Initial resistance is Y89.50. In euro-yen, the daily studies weakening, although in neutral territory as the cross slips back into the Ichimoku cloud (top at Y133.90). This leaves the cross searching for direction with next resistance nearby at Y134.80. Downturns face the 200-DMA and cloud base at Y131.75/90.

RES 4: Y92.32/53 Failure highs 27 Oct, 21 Sep, 100-day moving average
RES 3: Y91.31 High 4 Nov
RES 2: Y90.35/55 21, 55-day moving average
RES 1: Y89.90 Base of the Ichimoku cloud

SUP 1: Y88.50/73 Base of Bollinger band, Low 17 Nov
SUP 2: Y88.02/24 Major low 7 Oct, Low 25 Sep
SUP 3: Y87.81 100% projection of the 21 Sep pullback from 27 Oct high
SUP 4: Y87.12 Major lows Dec/Jan


CABLE
Cable opened Asia around $1.6805, with the early rise in gold providing risk trades with a lift taking cable to highs of $1.6835. Reversal in gold, as well as cross yen sales through the Tokyo fix saw cable ease back, breaking under the figure before picking up fresh demand interest that cushioned the move at $1.6783. Rate then settled into a $1.6787/07 range ahead of the European open, with fresh demand into the session taking rate to extended intraday highs of $1.6840. Rate currently trades around $1.6825. BOE MPC Minutes to be released at 0930GMT the morning's highlight, with focus on who voted for the stg25bln increase in QE (with special attention on King's vote). Offers seen placed toward $1.6850 ($1.6845 76.4% $1.6873/1.6755), a break above to open a move back toward $1.6870/80 ($1.6873 Tuesday high/$1.6879 NY high Monday). Support seen toward $1.6800, a break to open a deeper move toward $1.6785/75 ahead of $1.6755/50.

Reversals in cable have held above the 21-DMA, now at $1.6570 and while studies are starting to weaken, holding above there is looking key. Bulls eye the top of the daily Bollinger band, which is a rising target and currently at $1.6930. Break over there risks high/lows at $1.7044/52, while initial supports are $1.6750 and $1.6663. Euro-sterling reversed from the 21-DMA, which remains main resistance up at stg0.8985 and has now pushed below the 200-DMA of stg0.8870 to test the 100-DMA at stg0.8833. Daily studies have been bouncing along the lows through November but bears will be encouraged by the latest break lower and want to turn focus to Fibonacci levels at stg0.8822 and stg0.8786.

RES 4: $1.7240 100% projection of first October upwave
RES 3: $1.7044/52 High 5 August, November 2005 low
RES 2: $1.6930 Current top of the daily Bollinger band
RES 1: $1.6879 High 26 Nov

SUP 1: $1.6750 5-day moving average
SUP 2: $1.6663 Support line 13 October
SUP 3: $1.6570 21-day moving average
SUP 4: $1.6515 Low 12 Nov



OPTIONS AND MORE
FX Option expiries for today's 1500GMT cut

* Euro-dollar; $1.4800, $1.4830, $1.4950, $1.5000
* Dollar-yen; Y88.75, Y89.00, Y89.25
* Cable; $1.6600, $1.7030
* Aussie; $0.9300, $0.9350, $0.9450


EUROPEAN STOCKS: European equity bourses are seen opening higher Wednesday, with spreadbetters calling the FTSE-100 up 6pts, CAC-40 up 24pts and Xetra-DAX up 29pts. Basic materials stocks are watched for strength initially today with the commodity market stronger overnight, and earnings results from Air France-KLM (AF), Ahold (AHOE) and Land Securities (LAND) will be eyed for movement. On the macro front, the BoE minutes from the November meeting are due at 0930GMT, with UK CBI at 1100GMT, US Mortgage Application at 1200GMT, US CPI, Housing Starts and Building Permits all at 1330GMT. That said, Daniel Roy, equity strategist at Newedge does note the US CPI figure today are likely to be of little relevance to the equity market, with the housing data having more of an impact, although this will also be somewhat subdued because of currently slow nature of the market.

DAILY CALENDAR
European events for Wednesday start at 0840GMT when ECB President Jean-Claude Trichet gives the keynote address at a conference taking place during European Finance Week, in Frankfurt ECB Sep current account data is due shortly after, at 0900GMT.

The main focus for the UK is the release of the minutes of the November MPC meeting, at 0930GMT.

The Bank of England Governor noted a "range of views" on the MPC suggesting that the November minutes could reveal a split vote on extending quantitative easing. Indeed, the last split vote was in August ahead of the release of the August Inflation Report. Moreover, the fact that the MPC expanded QE at the smaller pace of Stg25 billion could suggest that a compromise was made. In theory a case could have been made for no further extension in QE and MPC member Sentance is the most likely candidate to be in this camp. A case for expanding QE by more than Stg25 billion could also have been made and Governor King and MPC member Miles currently appear to be the most activist on the team.

Hence, the first three-way split of the year is feasible. In any case, a debate on all three options is likely to have been made. As for interest rates, the vote on keeping rates at the historically low 0.5% is set to have been unanimous. However, the BoE projections highlighted that markets appeared to have got ahead of themselves yet again by pricing in over 100bp rate hikes in 2010. Interest rates then look set to remain unchanged for longer than has been priced in.

EMU Sep construction production data is due at 1000GMT, while back in the UK at 1100GMT, the November CBI Industrial Trends Survey is released.

US data starts at 1200GMT with the weekly MBA Mortgage Application Index, which is followed at 1330GMT by CPI and Housing Starts, Building Permits data.

Analysts expect October CPI to rise 0.2%, though gasoline pump prices fell slightly. Core CPI is expected to rise 0.1%. New model year vehicles should begin to enter the CPI data this month as well, while the pace of housing starts is expected to rise to a 600,000 annual rate in October after holding virtually steady over the last four months.

At 1400GMT, Treasury Secretary Timothy Geithner speaks at the Small Business Financing Forum in Washington, while Riksbank Deputy Governor Lars Nyberg delivers a speech on the financial crisis, in Stockholm.

Shortly after, at 1415GMT, St. Louis Fed President James Bullard speaks on the economy and monetary policy at a Commerce Bank Economic Breakfast. Back in Europe, at 1500GMT, Bundesbank Board member Thilo Sarrazin speaks about Germany after the federal elections, in Cologne.

The weekly EIA Crude Oil Stocks data is due at 1530GMT. Later on, at 1730GMT, Swiss National Bank Board member Philipp Hildebrand speaks on "Policy Implications of the Financial Crisis", in Geneva.

Tuesday, November 17, 2009

MORNING FX

BRIEFING
The dollar remained under pressure into early Asian trade, the US unit having been given brief respite from ongoing pressure by an unusual strong dollar comment from Fed Bernanke, euro-dollar dropping back from $1.4975 to $1.4880, but this move proved short lived as US yields remained low and Bernanke added dovish comments, with euro-dollar going on to post highs at $1.5017 ahead of this session's close. Rate opened Asia at $1.4972 with initial buying failing to lift it back above $1.5000, with Aussie dollar also opening firm, taking an initial boost from the release of RBA Minutes but quickly reversed as comments were viewed less hawkish than had been expected. Rate dropped from $0.9378 to $0.9324. Cable saw similar opening moves, trading up to $1.6846 (off NY rally highs of $1.6879) before slipping back on the Aussie turnaround. Tokyo fix saw currencies sold but Toshin demand provided a cushion to allow dollar-yen to straddle Y89.00 in a range of Y88.92/89.17. UK inflation data at 0930GMT provides early focus, with US PPI, TICS, Cap.Ut/IP and NAHB data this afternoon's highlights.

EURO
Dramatic moves during the NY afternoon Monday with the euro dropping from around $1.4975 to $1.4880 as Fed's Bernanke made a comment on a strong-dollar, but additional comments reiterated the recent dovish tome which saw rate rally back, pushing up to post fresh intraday highs at $1.5017. Rate opened the Asian session back at $1.4975 with early model demand lifting it on to $1.5000 but reported sovereign supply provided decent resistance. The negative reaction to the RBA Minutes took the shine off risk on trades, Asian equity markets not following Wall Street's late rally, with euro-dollar slipping back to initial lows at $1.4946, stretching on late in the session to $1.4935 ($1.4932 61.8% $1.4880/1.5017). Rate was lifting back into the European session on reported Asian sovereign buys, recovering to current level around $1.4960 (38.2% $1.5000/1.4935). A move above here to allow for a challenge on $1.4975/85 ahead of $1.5000. Stronger offers said to remain in place between $1.5015/20 ahead of $1.5050/65. Support $1.4935/30, $1.4915/10 ahead of $1.4880 (seen pivotal intraday).

Euro-dollar faded ahead of the highs at $1.5060/64 and the subsequent pullback is holding around the 5 & 21-DMAs at $1.4890 and $1.4945. These levels remain in focus as the euro seeks direction with bulls encouraged by a positive daily stochastic study but momentum uninspiring. The pair remains broadly constructive above the 17 August support line at $1.4732.

RES 4: $1.5235 2% moving average envelope
RES 3: $1.5163/82 76.4% of decline from July 2008 high, Res line 3 June
RES 2: $1.5100 Current Bollinger band top
RES 1: $1.5047/64 High 11 Nov, Double-day high 23, 26 October

SUP 1: $1.4890 21-day moving average
SUP 2: $1.4788 61.8% retracement of $1.4628 rally, 1% MAE
SUP 3: $1.4732 Support line 17 Aug
SUP 4: $1.4628/80 Low 3 Nov, Base of Bollinger band





YEN
After slipping five-week lows at Y88.75 in the US session Monday, dollar-yen closed around Y89.05, as euro-yen ended towards the bottom of the range at Y133.30. Asian dealing found yen pairs notching early highs, dollar-yen moving to Y89.17 as the cross edged up to Y133.58, before Tokyo names stepped in to sell the currencies into the fixing. Dollar-yen dropped back to Y88.95 as euro-yen slipped to Y133.10, before a period of consolidation into the afternoon session. Dollar-yen bids said to come in under Y88.80, with a deeper move set to expose a move towards the October lows just ahead of Y88.00. Euro-yen stops reported under Y133.90, which if triggered would expose further slippage within the Ichimoku Cloud, the base of which come in today at Y131.74. Traders are noting a shift in sentiment over recent sessions, beginning to see yen demand from a variety of names, including long-term models cutting yen shorts and real-money accounts taking an interest in the Japanese currency on a reweighting basis. Spec names are also eyeing yen inflows from increasing Japanese share issuance.

Dollar-yen studies remain soft and just above oversold levels as the market trades below the Ichimoku cloud at Y89.95 and bears focus on the Y88.02 lows. Any break there will get bears focused on the major low of Y87.12, although there is also a trendline from April 1995 at Y87.58. Initial resistance is Y89.60. The daily studies are in neutral territory in euro-yen and not giving much direction as the cross slips back into the Ichimoku cloud (top at Y133.90). This leaves the cross searching for direction with next resistance nearby at Y134.80. Downturns face the 200-DMA and cloud base at Y131.70.

RES 4: Y92.32/53 Failure highs 27 Oct, 21 Sep, 100-day moving average
RES 3: Y91.31 High 4 Nov
RES 2: Y90.55/65 21, 55-day moving average
RES 1: Y89.95 Base of the Ichimoku cloud

SUP 1: Y88.65/80 Base of Bollinger band, Lows 14 Oct, 16 Nov
SUP 2: Y88.02/24 Major low 7 Oct, Low 25 Sep
SUP 3: Y87.81 100% projection of the 21 Sep pullback from 27 Oct high
SUP 4: Y87.12 Major lows Dec/Jan





CABLE
Opened the Asian session around $1.6825, off NY session rally extension highs of $1.6879. Initial pressure on the dollar into the Asian session allowed rate to push higher again, though this time the move up was restricted to $1.6846. The early risk on tone quickly faded as Asian equity markets moved into negative territory, ignoring the late Wall Street rally, and the Aussie reacted negatively to the RBA Minutes, seen less hawkish than had been hoped for. Cable dropped back to $1.6798. Rate was recovering ahead of the European open, with momentum increasing into the session to take rate through the overnight high and on to $1.6860 (76.4% $1.6879/1.6798). Move seen driven by reported euro-sterling sell interest, suggested to be linked to M&A interest. The cross opened around stg0.8896, off NY lows of stg0.8873, edging to mark highs at stg0.89075 before slipping lower, extending intraday lows to stg0.8878. Bids placed toward stg0.8870, a break exposes stg0.8845/40. Resistance stg0.8905/10, stg0.8940/45. Cable offers $1.6860, $1.6880, $1.6900. Bids $1.6830/20, $1.6800, stops $1.6795/90.

Reversals in cable held above the 21-DMA, now at $1.6550 and while studies remain fairly neutral, holding above there is looking key. Bulls eye the top of the daily Bollinger band, which is a rising target and currently at $1.6900. Break over there risks high/lows at $1.7044/52, while initial supports are $1.6710 and $1.6626.

RES 4: $1.7240 100% projection of first October upwave
RES 3: $1.7044/52 High 5 August, November 2005 low
RES 2: $1.6900 Current top of the daily Bollinger band
RES 1: $1.6879 High 26 Nov

SUP 1: $1.6710 5-day moving average
SUP 2: $1.6626 Support line 13 October
SUP 3: $1.6550 21-day moving average
SUP 4: $1.6515 Low 12 Nov






OPTIONS AND MORE
FX Option expiries for today's 1500GMT cut

* Euro-dollar; $1.4950, $1.4955, $1.4800
* Dollar-yen; Y89.75, Y90.10, Y90.15, Y90.20, Y90.35
* Euro-yen; Y131.00
* Aussie; $0.9355, $0.9400


IMF/Gold: The sale of another 2 metric tons of gold was announced Monday night, this time to the central bank of Mauritius. Worth about $717 mln and adds to the 200 metric tons already sold to the Reserve Bank of India. A total of 403.3 tons being sold 'in a phased manner over time.' See the text repeated on the MNI main wire.

DAILY CALENDAR
The US visits to Asia continue with President Obama meeting the Chinese Premier today. Also, at 0700GMT, IMF Managing Director Dominique Strauss-Kahn holds a press conference in Beijing at the conclusion of their China visit.

At 0800GMT, ECB Governing Council member Ewald Nowotny introduces a morning session, at the conference in Vienna, which is followed at 0830GMT when ECB's Yves Mersch and Belgian Finance Minister Didier Reynders speak at the 5th Economic Forum Belgium-Luxembourg-Arab Countries, taking place in Brussels.

At 0845GMT, ECB Governing Council member Ewald Nowotny chairs a panel on Financial Market Stability in Central and Eastern Europe. UK data sees October CPI data at 0930GMT.

Having dropped to the lowest level in five years, annual CPI is expected to start creeping up from October with forecasts of 0.1% m/m, 1.4% y/y as favourable base effects go into reverse. This will be the first rise since February.

The EMU Sep trade balance is due at 1000GMT, US events start at 1030GMT when San Francisco Fed President Janet Yellen delivers a speech on linkages between monetary and regulatory policies to the Institute of Regulation & Risk in Hong Kong.

At 1200GMT, ECB's Guy Quaden speaks at the 5th Economic Forum Belgium-Luxemburg-Arab Countries, in Brussels.

US data starts at 1245GMT with the weekly ICSC-Goldman Store Sales, which is followed at 1330GMT by PPI, at 1355GMT by the weekly Redbook Average, at 1400GMT by the weekly TICS data and at 1430GMT by Industrial Production and Capacity Use data.

Producer prices are expected to rise 0.5% in October on a rise in energy prices following sharp movements in recent months. Gasoline pump prices were reported down slightly, but crude prices rose. Core PPI is expected to rise 0.1%. The 2010 model year vehicles should begin to appear in the data.

Industrial production is expected to rise 0.4% in October after posting a third straight increase in September. Manufacturing production is expected to posted another increase. Factory payrolls fell 61,000 in the month, but auto production jobs rose 5,000. The factory workweek rose to 40.0 hours, while the ISM production index rose to 63.3. Capacity utilization is forecast to rise only slightly to 70.7%.

At 1430GMT, ECB Executive Board member Juergen Stark speaks at a Business Process Management Conference in Frankfurt.

At 1500GMT, Richmond Fed President Jeffrey Lacker delivers a speech on the economic outlook to the Virginia House Appropriations Committee in Richmond.

Back in Europe at 1600GMT, ECB Executive Board member Gertrude Tumpel-Gugerell speaks on 10th anniversary of the euro, while at 1700GMT, ECB President Jean-Claude Trichet introduces Eurogroup Chairman Jean-Claude Juncker at European Banker of the Year event, in Frankfurt.

At 1755GMT, Cleveland Fed President Sandra Pianalto delivers a speech to the Annual Ohio Housing Conference in Columbus.

Later US data sees the 1800GMT NAHB Housing Market Index and the 2200GMT release of the weekly ABC

17 November 2009

MORNING FX
BRIEFING
The market this week will be focusing on inflation data for most of the major economies, as well as Q3 GDP for several EM countries. Fed Bernanke headlines a week full of speeches by Fed officials, Bernanke, Fisher and Kohn are due to speak this evening. Most expected to repeat that exits from non-conventional policies are necessary but still too early to initiate such moves. ECB Trichet speaks Thursday and Friday. RBA and MPC minutes will be released on Tuesday and Wednesday respectively. The dollar came under early pressure into Asian trade as any hopes for a surprise change in the yuan were quashed in Chinese press reports over the weekend. Cable was pressured higher in early trade as a Swiss bank hunted out stops above $1.6700, taking the rate to highs of $1.6735. The move lifted euro-dollar and Aussie with it, the former trading up from early lows at $1.4905 to $1.4974. Aussie trailed the rally as Aussie-yen sales provided counter. Dollar-yen was pressed lower, stronger than expected Q3 GDP data and model fund sales providing weight though countered by Toshin-linked buyers.

EURO
Euro-dollar opened Asia around session lows of $1.4905 and was pressured higher as the dollar came under early pressure as weekend hopes for a statement from China for a change in the yuan peg were quashed by press reports. Rate pushed to an initial high of $1.4965 before momentum waned, the rate slipping back to $1.4935 as euro-yen was sold off after the Tokyo fix. A reversal in the cross, on reported short covering, allowed euro-dollar another rally this time extending the session highs to $1.4974. Upside pressure remains into early Europe with the topside stretching on to $1.4979, currently trading around $1.4975. Offers seen placed toward $1.4980/85, stronger on approach to $1.5000 with one trader suggesting that sovereign accounts are expected to try and keep rate enclosed within a $1.4800/1.5000 range. A break above $1.5000 to expose $1.5015/20 ahead of stronger $1.5050/65 area. Barriers have recently been noted at $1.5050 and at $1.5070 (recent high $1.5049), as well as a $1.48/1.51 short dated dnt in play (helped to keep rate buoyed above $1.4800 Friday). Support $1.4920, $1.4905/00.

The euro-dollar faded ahead of the highs at $1.5060/64 and the subsequent pullback is holding around the 5 & 21-DMAs at $1.4890 and $1.4945. These levels remain in focus as the euro seeks direction with bulls encouraged by a positive daily stochastic study but momentum uninspiring. The pair remains broadly constructive above the 17 August support line at $1.4722.

RES 4: $1.5210 2% moving average envelope
RES 3: $1.5163/75 76.4% of decline from July 2008 high, Res line 3 June
RES 2: $1.5100 Current Bollinger band top
RES 1: $1.5047/64 High 11 Nov, Double-day high 23, 26 October

CURRENT LEVEL: $1.4965

SUP 1: $1.4890 21-day moving average
SUP 2: $1.4788 61.8% retracement of $1.4628 rally
SUP 3: $1.4722 Support line 17 Aug
SUP 4: $1.4628/80 Low 3 Nov, Base of Bollinger band



YEN
Japan Q3 GDP came in well ahead of expectations at +1.3% q/q (cons. +0.7%). representing the fastest rate of growth seen since Q1 2007, though analysts sounded a note of caution as inventory replenishment contributed +0.4% to the final figure. Note Q2 GDP was also revised up from 0.6% to 0.7% q/q. Traders said the data failed to inspire the currency market, with main focus centred around talk of sizeable Toushin issuance for today and tomorrow. Model supply of yen crosses pulled dollar-yen lower in the morning session,dropping under Friday's Y89.46 NY low to Y89.38 as euro-yen slipped to Y133.65. Chatter of semi-official demand under Y89.40 provided a cushion, prompting spec buying of dollars and lifting the pair back to the day's highs at Y89.74. Euro-yen meanwhile was able to regain the Y134 handle, moving to a Y134.18 high into the Asian afternoon. Toushin takeup said to be disappointing for today's launch, though Tuesday's offering said to be attracting stronger interest. Dollar-yen offers seen into Y90.00 with stops at Y90.05. Downside stops are lurking through Y89.30.

Dollar-yen studies remain soft and just above oversold levels as the market trades below the Ichimoku cloud at Y89.95 and bears focus on the Y89.21 lows. While that low remains in place, the main nearby Fibonacci levels are Y90.77 and Y91.13, although break there will get bears focused on the major low of Y88.02.

RES 4: Y92.32/53 Failure highs 27 Oct, 21 Sep, 100-day moving average
RES 3: Y91.31 High 4 Nov
RES 2: Y90.70 21, 55-day moving average
RES 1: Y89.95 Base of the Ichimoku cloud

CURRENT LEVEL: Y89.57

SUP 1: Y89.21/28 Spike low 30 Oct, Low 11 Nov
SUP 2: Y88.80/90 Lows 14 Oct, Base of Bollinger band
SUP 3: Y88.02/24 Major low 7 Oct, Low 25 Sep
SUP 4: Y87.81 100% projection of the 21 Sep pullback from 27 Oct high



CABLE
Opened in Asia around $1.6700 and was the first pair to take advantage of the weaker dollar view into early Asian trade, the rate pushing up to session highs of $1.6735 on reported Swiss name buying as it hunted for stop above $1.6710. Rate eased off as yen crosses came under pressure after the Tokyo fix, the rate easing to $1.6685/80. Rate then settled between $1.6690/1.6720 before picking up a fresh bid tone into late Asian trade, the rate breaking above Asian highs into early European dealing, extending the highs to $1.6750. Rate continues to pressure the upside, currently trading around $1.6748. Offers seen placed between $1.6750/55 with stops positioned on a break of $1.6760, which if triggered to expose recent, post BOE Inflation Report highs of $1.6799, with offers noted toward $1.6800. Interim interest also expected to emerge around $1.6780/85. Bids reported at $1.6735/30 ahead of $1.6700, $1.6680.

The focus for cable is the sharp reversal from the $1.6844 high and support at the 21-DMA, now at $1.6515. Studies remain fairly neutral, leaving reaction to the 21-DMA looking key. One warning for the bulls continues to be the recent "hanging man" pattern, which is a reversal signal and could be a sign the Oct/Nov rally is stalling. Euro-sterling briefly pushed over the 21-DMA but with a sharp pullback on Thursday failed to close above there, which is now resistance at stg0.9015. Daily studies have been bouncing along the lows through November and while stg0.8896 remains the low, the main Fibonacci levels are stg0.9093, stg0.9154 and stg0.9214. Initial resistance is at stg0.8970. Bears will continue to focus on the stg0.8896 low.

RES 4: $1.7240 100% projection of first October upwave
RES 3: $1.7044/52 High 5 August, November 2005 low
RES 2: $1.6844 High 9 Nov, Current top of the daily Bollinger band
RES 1: $1.6767 Minor Fibonacci level

CURRENT LEVEL: $1.6715

SUP 1: $1.6660 5-day moving average
SUP 2: $1.6589 Support line 13 October
SUP 3: $1.6515 21-day moving average, Low 12 Nov
SUP 4: $1.6470/85 61.8% retracement of $1.6240 to $1.6844




OPTIONS AND MORE
FX Option expiries for today's 1500GMT cut

* Euro-dollar; $1.5000, $1.4980, $1.4900, $1.4800
* Dollar-yen; Y90.00, Y91.00
* Aussie; $0.9050


Elsewhere, speculative accounts further increased their net euro long positions as well as their net yen long positions as per Nov 10, according to CFTC data released Friday. The net position in non-commercial futures (ex-options) showed that speculators increased their net euro long to +25,712 contracts, the CFTC said. This compares to last week's net long of +22,191 contracts and the +51,045 contracts seen October 6, which was the largest long since Jan 8, 2008. In the yen, as per Nov 10, spec accounts had a net yen long of +21,878 contracts. This compared to last week's long of +19,832 and the net yen long of +45,615 contracts, seen September 22, which was the largest since Feb 3, when speculative accounts had a net long of +50,518 contracts, the largest of 2009. Spec accounts have maintained a net euro long position since May 5 and a net yen long since July 7. The euro closed at $1.4982 and dollar-yen at Y89.84 Nov 10, which compares to Friday's closing levels of $1.4905 and Y89.67.

DAILY CALENDAR
The calendar for Monday is dominated by central bank speakers, starting at 0715GMT when ECB Governing Council member Ewald Nowotny speaks on economic integration in Europe, in Vienna.

European data starts at 0730GMT with the Bank of France Oct retail sales survey.

At 0815GMT, EU Commissioner for Economic & Financial Affairs Joaquin Almunia speaks, in Vienna.

For the UK, there is no major data due, but at 0815GMT Bank of England Deputy Governor Paul Tucker gives an address at the Belgian Financial Forum, in Brussels.

At 0850GMT, ECB Governing Council member Axel Weber speaks on "Lessons and Consequences from the Financial Crisis" for Germany, in Frankfurt while at 0900GMT, ECB Governing Council member Ewald Nowotny chairs a panel on the euro in times of crisis with Riksbank Deputy Gov. Karolina Ekholm and Bank of Portugal Deputy Gov. Pedro Duarte Neves, in Vienna.

European data at 1000GMT sees the German November DIW as well as the EMU Oct final HICP, which is expected to confirm the flash release.

At 1045GMT, ECB Executive Board member Gertrude Tumpel-Gugerell, Hungarian National Bank Gov. Andras Simor, Poland National Bank President Slawomir Skrzypek and Czech National Bank Gov. Zdenek Tuma all take part on a panel at the Austrian National Bank, in Vienna.

Speakers continue into the European afternoon, at 1315GMT, when ECB Governing Council member Ewald Nowotny presents an award, while at 1330GMT, ECB Governing Council member Ivan Sramko and National Bank of Romania Deputy Gov. Cristian Popa participate in a panel discussion, in Vienna.

US data starts at 1330GMT, when retail sales are expected to rise 0.9% in October. Industry light vehicle sales rose modestly in the month after see-sawing in August and September. Meanwhile, gasoline prices fell slightly and should partly offset gains in other categories. Sales excluding motor vehicles and parts are expected to rise 0.4%.

Also at 1330GMT, the NY Fed Empire State Index is expected to fall to a reading of 29.0 in November, after jumping to 34.57 in October.

This is followed by the weekly MNI Capital Goods Index at 1430GMT, while at 1500GMT, US business inventories are expected to fall 0.8% in September. Factory inventories were already reported down 1.0%, while wholesale inventories down 0.9%.

At 1500GMT, ECB Governing Council member Erkki Liikanen speaks, in Tampere, Finland.

US data for Monday concludes at 1530GMT with the weekly MNI Retail Trade Index.

At 1615GMT, ECB Governing Council member Guy Quaden speaks at the Belgian Finance Forum Conference, in Brussels.

European speakers continue into the evening, at 1800GMT, when Bundesbank Vice President Franz-Christoph Zeitler speaks, in Frankfurt, while at the same time, ECB Governing Council member Ewald Nowotny introduces a dinner discussion on east/west integration, in Vienna.

Also at 1800GMT, Bank of England MPC member Andrew Sentance delivers a speech at Royal Holloway, University of London.

US central bank speakers come late in the day, starting at 1815GMT with Dallas Fed President Richard Fisher who delivers remarks on the economy at the bank's community forum in Tyler, Texas. At 2315GMT, Fed Vice Chair Donald Kohn delivers a speech on policy challenges at Northwestern University in Evanston, Ill.

Tuesday, November 10, 2009

10 November 2009

MORNING FX

BRIEFING
Risk remained in favour into early Asian trade, supported by the positive close on Wall Street, though early pressure on the dollar was tempered by reported Asian sovereign demand. Euro-dollar continued to meet headwind supply on moves above $1.5000, with reports of ACB supply situated between $1.5020/30 countering upside pressure and allowing for a pullback from early highs of $1.5013 to $1.4950. Aussie and Kiwi traded with an underlying form tone, but profit taking by real money accounts helped to cap the former below $0.9330. Sterling was given a minor lift on release of stronger than expected BRC retail sales and RICS housing data, but the positive react only provided for better levels for stale longs to cover back. Sterling was given a severe shock late on as Fitch Head of Sovereigns suggested UK was most at risk for a downgrade among major economies. Cable dropped from $1.6760 t0 $1.6600, slowly clawing its way back into the European open. US data calendar remains light, German CPI at 0700GMT, UK trade at 0930 GMT and ZEW at 1000GMT the morning's highlights.

EURO
Euro-dollar opened Asia around $1.4990, the rate having consolidated during the NY afternoon in a tight range around $1.5000. Risk remained in favour into early Asian dealing with the dollar coming under early pressure, the rate able to move above $1.5000, posting highs at $1.5013 before meeting resistance. Strong talk in Asia of ACB sell interest between $1.5020/30. Rate reversed as spec longs covered back, with strong sales of euro-yen, along with noted sales from model funds, adding weight that took rate back to $1.4970. Swiss name demand provided some respite, lifting rate to $1.4980 before further sales knocked it down to $1.4950. This latter move was seen led by a reaction to Fitch comments suggesting UK was most at risk of losing its AAA staus among the four leading economies, dropping cable 150 points. However, comment that Germany was the least likely provided for a stronger recovery in euro-dollar, taking it to $1.4990 area, while cable lagged correction. Euro-dollar bids remain at $1.4950, with resistance $1.5020/30. Russian sales of euro-dollar into early Europe ease rate back to $1.4982.

The momentum is still struggling to maintain an upward break in euro-dollar, although the pair has seen a bull-cross in the daily Stochastic study and now in the 5 & 21-DMAs, which are initial support at $1.4915 and $1.4885. Close above 21-DMA helps bulls to turn attention to the $1.5060/64 highs.

RES 4: $1.5135 2% Moving Average Envelope
RES 3: $1.5090 Current Bollinger band top
RES 2: $1.5060/64 Double-day high 23, 26 October
RES 1: $1.5021 High 9 Nov

CURRENT LEVEL: $1.4976

SUP 1: $1.4915 5-day moving average
SUP 2: $1.4885 21-day moving average
SUP 3: $1.4680 Support line 17 Aug, 1% MAE, Base of Bollinger band
SUP 4: $1.4618/20 76.4% of Oct recovery, 50% of Sep-Oct advance





YEN
Dollar-yen closed a quiet US session around Y89.95, with euro-yen also holding steady to end around Y134.90. Initial lows were hit into the Asian session around Y89.80 before Japanese real-money demand kicked in, lifting the pair to session highs at Y90.05. Option related selling was noted here, amid reports of decent-sized expiry interest rolling off at Y90.00 in the next few days. Euro-yen hit early highs at Y135.00 before slipping back to the Y134.70 and holding within a tight range over the remainder of the morning session. Dollar-yen held above Y89.80 into the Asian afternoon before a late dip to the day's lows at Y89.68 as euro-yen slipped to Y134.30, despite a positive close for the Nikkei. Early European dealing sees both pairs holding off lows, offers seen at and around Y90.00, more at Y90.35/45 with system stops still lurking at Y90.50. Key resistance still seen as the base of the falling Ichimoku Cloud at Y90.40. Options traders report increasing demand for one-month to six-month dollar-yen upside via both vanilla and exotic trades.

The daily stochastic remains soft as the market holds below the Tenkan line and 21-DMA at Y90.50/70. The market is stalling around Fibonacci level of Y89.66 and spike low of Y89.21, while main nearby resistance is the base of the Ichimoku cloud, at Y90.40. The daily stochastic seeks a base in euro-yen although momentum is yet to make a bull-cross. After recently breaking the base of the Ichimoku cloud, the cross has now exceeded the top at Y133.90, which becomes initial support and will encourage bulls if the break is sustained and Fibonacci/high at Y135.64/98 can be tackled.

RES 4: Y92.80/90/00 100-DMA, 50% of Aug/Oct decline, Ichimoku cloud top
RES 3: Y92.32/53 Failure highs 27 Oct, 21 Sep
RES 2: Y91.31 High 4 Nov
RES 1: Y90.40 Base of the Ichimoku cloud

CURRENT LEVEL: Y89.80

SUP 1: Y89.66 61.8% retracement of October rally
SUP 2: Y89.21 Spike low 30 Oct
SUP 3: Y88.80 Lows 14 Oct
SUP 4: Y88.24 Low 25 Sep





CABLE
Opened Asia at $1.6760 with early risk trade, following the positive close on Wall Street, allowing the rate to drift up to highs of $1.6789, with traders noting reaction to strong BRC retail sales and RICS housing data tempered as stale longs took advantage to pare back positions. Rate eased to $1.6735, recovering back to $1.6760 before dropping violently lower as market reacted to Fitch comments suggesting that out of the four major economies the UK was most at risk of losing its AAA status. Cable dropped to $1.6610 in a straight line, the move extending to $1.6600 before rate slowly clawed its way higher, edging to $1.6675/80 into the european open. Fresh sell interest took rate back to $1.6625, the recovery boosted as a 'good name' bought sterling between $1.6630/35 to take it up to $1.6665/70. Recovery efforts remain laboured, a break above $1.6680 to boost a positive feel, but while it remains below seen keeping the overnight lows in view. Bids now reported between $1.6610/00 with stops $1.6595/90.

The focus for cable is the sharp reversal from the $1.6844 high, which is holding around the 5-DMA of $1.6620 but remains above the key 21-DMA at $1.6425. Studies are mixed with a downturn in momentum yet to make a bear-cross. While above $1.6425 and a minor support line at $1.6451, bulls will hope for a return to the topside. Euro-sterling remains below the 21-DMA at stg0.9065 with daily studies still bouncing along the lows. While stg0.8896 remains the low, the main Fibonacci levels are stg0.9093, stg0.9154 and stg0.9214. Initial support & resistance is at stg0.8965 and stg0.9017.

RES 4: $1.7240 100% projection of first October upwave
RES 3: $1.7044/52 High 5 August, November 2005 low
RES 2: $1.6844 High 9 Nov
RES 1: $1.6790 Current top of the daily Bollinger band

CURRENT LEVEL: $1.6630

SUP 1: $1.6620 5-day moving average
SUP 2: $1.6425 21-day moving average
SUP 3: $1.6240 Low 19 Oct
SUP 4: $1.6115/34 High 8 Oct, Low 1 Sep, Spike 30 Sep, Low 21 Sep






OPTIONS AND MORE
FX Option expiries for today's 1500GMT cut

* Euro-dollar; $1.5000, $1.5050
* Dollar-yen; Y89.00, Y90.00, Y90.70, Y91.00
* Cable; $1.6700
* Aussie; $0.9250(lge)


European equity bourses are seen opening higher today, buoyed by a strong session on Wall St overnight. Earnings results from Vodafone (VOD), Credit Agricole (ACA) and a trading statement from HSBC (HSBA) will take focus on the corporate front this morning, and on the economic calender, UK Trade Balance data and UK DCLG House Prices at 0930GMT, as well as German ZEW at 1000GMT, will be eyed for direction. Spreadbetters have the FTSE-100 up 16pts, CAC-40 up 5pts and Xetra-DAX up 13pts.

DAILY CALENDAR
European data started with the inflation data for Germany at 0700GMT, where German HICP was revised down to +0.1% for the month in October, bringing the annual rate to -0.1%, the Federal Statistical Office reported on Tuesday. The HICP was below the median forecast.

France industrial production data is due at 0745GMT and is expected to rise by 0.5% m/m, falling by a reading of -9.7% y/y. Industrial investment data is due at 0750GMT, while Italian industrial output data follows at 0900GMT.

UK data at 0930GMT sees the DCLG House Price Index and the Total Trade Balance data, which are followed at 1000GMT by the latest Leading Indicator Index .

The main European data release is the 1000GMT ZEW data. The ZEW economic sentiment indicator fell by 1.7 points to 56.0 in October, following a 1.6-point rise in September. Meanwhile, its current conditions counterpart posted a fifth successive gain in the month, rising by 1.8 points to hit -72.2. Another mixed picture is expected today with median forecasts looking for a decline to 54.3 but an improvement to -70 in those numbers.

The European afternoon and evening are dominated by a long list of European and Fed speakers, starting at 1300GMT, when ECB Governing Council member Marko Kranjec speaks on a panel (to be confirmed), in Vienna.

US data starts just ahead of then, at 1245GMT with the weekly ICSC-Goldman Store Sales data, which is followed by the weekly Redbook Average at 1355GMT.

At 1400GMT, ECB Governing Council member Jose Manuel Gonzalez-Paramo speaks in the European Parliament.

At 1415GMT, Atlanta Fed President Dennis Lockhart delivers a speech on the economy to the Urban Land Institute conference in Atlanta, while at 1500GMT, San Francisco FedP resident Janet Yellen delivers a speech on the economic outlook and real estate to Lambda Alpha International in Phoenix.

The US Economic Optimism Index is also due at 1500GMT. At 1545GMT, ECB Governing Council member Jose Manuel Gonzalez-Paramo is due to give a keynote speech on the origins of the crisis and possible solutions, in Brussels.

At 1615GMT, Boston Fed President Eric Rosengren delivers a speech to the European Economics and Financial Centre in London.

In Norway, at 1630GMT, Norges Bank Deputy Governor Jan Qvigstad delivers a speech at the Norwegian Academy of Science and Letters, in Oslo. Data then continues with the 1700GMT release of the Energy Information Agency monthly Short-Term Energy Outlook.

Later on, US data sees Treasury Allotments By Class at 2000GMT, while at 2030GMT, Fed Governor Daniel Tarullo speaks on resolution authority to the Institute of International Bankers in New York.

The weekly ABC News Survey is released at 2200GMT. Into 0030 Wednesday, Dallas Fed President Richard Fisher delivers a speech on the economic outlook to the Austin Headliners Club in Austin.




Best Regards,

NordMarkets.com

Monday, November 2, 2009

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