Trading Economic News - Page 35

John Rivera · #**511** (**permalink**) 03-11-2009, 11:55 AM

U.S. Advance retail sales for February are due out tomorrow and the consensus is that demand dropped by 0.5%. Considering that we saw an improvement in clothing and electronics on the back of discounting in January which accounted for its unexpected improvement then we could see a reversal in those components and a lower than expected print. Dour news could temper recent risk appetite and lead to dollar bullish sentiment.

CFDTrading · #**512** (**permalink**) 03-11-2009, 05:07 PM

Wednesday, 11 March 2009 13:02:59 GMT
Written by John Rivera, Analyst
Full Article

The confidence in the banking sector has started to return after Citigroup forecasted that it would have its best quarter since 3Q of 2007 and U.S. Treasury Secretary Tim Geithner predicts the bank rescue plan will succeed. The positive Citigroup news helped send stocks to the biggest one day rally since late November as Citi CEO Vilram Pandit said the bank was profitable in the first two months. On Charlie Rose yesterday the Treasury Secretary said that the details for dealing with the toxic assets on banks balance sheets will be unveiled in the next couple of weeks. He expressed confidence that the plan would work but would take time to work. Banking stocks have been beaten down and many trading at multi –decade lows leaves huge upside potential for them and if they continue to receive support, it may drag the entire market higher. Meanwhile, MBA mortgage applications showed a 11.3% increase which was a reversal from last weeks 12.3% decline which will also helped fuel bullish sentiment.

Dow Jones 6926.49
The DJIA futures were pointing toward a positive open as the increasing confidence in the banking sector should help lift financials higher. However, a 25.7% drop in Chinese exports in February dampened optimism overnight as the fears of a deepening global recession increased.

NASDAQ 1358.28
The Nasdaq across the board gains yesterday led by a 8.06% jump in tech stocks. The sector continues to be the favorite of traders and should continue to benefit from broader bullish sentiment.

S&P 500 719.60
The S&P 500 could benefit from continue support for financials as the sector was up 15% yesterday.

CFDTrading provides news on the economic reports and political events that influence the CFD traders.

John Rivera · #**513** (**permalink**) 03-12-2009, 10:37 AM

The SNB cut their target rate to 0.25% and signaled that they would start to intervene to weaken their currency in an effort to help boost demand for exports. The Franc sunk on the news against all major currencies with a 300 bps plus loss against the dollar. We are starting to Yen weakness as traders start to hedge against the BoJ following suit.

John Rivera · #**514** (**permalink**) 03-16-2009, 10:56 AM

Sometime during Asian trading the BoJ will announce their interest rate decision. Although there is no expectation that they will change their current 0.1% rate, many will be watching to see if the central bank hints at intervening in the market to weaken they Yen. The SNB decision last week to alert markets of their intention to do the same against the Franc send the USD/CHF soaring. Therefore, we could see a similar reaction of the BoJ follows the same path.

Also, the German Zew survey is expected to show business confidence slipped in March which could derail the recent Euro rally.

John Rivera · #**515** (**permalink**) 03-17-2009, 11:13 AM

U.K. employment figures are due out tomorrow and the expectations are that we may see the worse one month job loss since 1991 and the unemployment rate rise to the highest since 1999. The deteriorating labor market will dim the outlook for domestic growth which could weigh in the Sterling. The GBP/USD has already been turn away by the 20-Day SMA and we may see further losses.

Also, the FOMC policy meeting is over the next two days and although there is no expectation that the central bank will change rates, traders are looking to see if they will expand their current efforts of buying long-term debt.

John Rivera · #**516** (**permalink**) 03-18-2009, 09:57 AM

Today we saw the markets front run the U.K. employment numbers which showed jobless claims rising by 138,400-the most on record. I got in once support at 1.400 was broken and was able to grab a 150 pips after the spike lower following the release. Yet, we didn't see the follow through that would make me think that fundamentals are starting to have a bigger impact on price action, as we are still see traders react more on risk sentiment.

beeryboogy · #**517** (**permalink**) 03-18-2009, 09:54 PM

Quote:

Originally Posted by John Rivera

Today we saw the markets front run the U.K. employment numbers which showed jobless claims rising by 138,400-the most on record. I got in once support at 1.400 was broken and was able to grab a 150 pips after the spike lower following the release. Yet, we didn't see the follow through that would make me think that fundamentals are starting to have a bigger impact on price action, as we are still see traders react more on risk sentiment.

Good thing you weren't shorting the GBPUSD through the FOMC release today though!

John Rivera · #**518** (**permalink**) 03-23-2009, 10:51 AM

Didn't see the dollar's bullish reaction coming following Geithner's release of the details of the bank rescue plan. I thought the pick up in risk appetite (Dow up 250+ points) would weigh on the greenback. We may see a revisit to the US will be first to emerge sentiment which had helped to initiate the dollar rally. EZ PMI and UK CPI will present event risk during Asian trading. Further deterioration in the EZ economy could add to today's weakness. Trichet hinting at further easing could also fuel bearish sentiment. Meanwhile, increasing deflationary pressures may reverse recent sterling bullish sentiment as CPI is expected to fall to 2.6%, as it steadily approaches the central bank's 2% target.

John Rivera · #**519** (**permalink**) 03-24-2009, 10:02 AM

The U.K. CPI report showed that inflation had unexpectedly rose to 3.2% from 3.0% which sen the pound soaring as expectations that the BoE would pull back on their quantitative easing efforts because of it. Governor king spoke shortly after the speech and although he confirmed that inflation would dictate when the central bank would exit the program to but back debt, he firmly expects inflation to undershoot the bank's 2% target. The remarks would lead to a reversal in price action as the GBP/USD would erase the post release gains. Tomorrow we will see German IFO and US Durable Goods cross the wires and both are expected to show slight improvements from the month prior, but still point toward further contraction.

John Rivera · #**520** (**permalink**) 03-26-2009, 10:28 AM

Tim Geithner's prepared testimony has been released and his call for a comprehensive overhaul for the financial system has fueled risk aversion and dollar support.

John Rivera · #**521** (**permalink**) 03-30-2009, 12:57 PM

The G-20 Summit is ahead and it could be the major event risk of the week. Although we have U.S. NFP's ahead, the 600,000+ job loss that is expected won't be a major surprise. Therefore, the outcome from the summit may have a greater impact on volatility if the markets are disappointed or pleased with the steps taken.

John Rivera · #**522** (**permalink**) 03-31-2009, 11:32 AM

The ISM manufacturing report is due out tomorrow and if it follows the Chicago and New York regional prints then we may see a disappointment. Currently expectations are for a slight improvement to 36.0 from 35.8. The print will be released at 14:00 GMT which will follow the ADP report which is expected to show job losses fo over 600,000 for another month and the combination of the two could spark risk aversion and dollar support. Also keep an eye out for the pending home sales report which is expected to be flat. A positive reading would continue the trend of improvement in the sector which could reverse any bullish dollar sentiment.

John Rivera · #**523** (**permalink**) 04-01-2009, 11:47 AM

The upcoming ECB rate decision may determine the medium term trajectory for the Euro. The central bank is expected to lower its benchmark rate by 50 bps to 1.00% - the lowest in its existence and possible announce further measures to help stem the economic downturn. The regions continues to see manufacturing activity contract and prices fall which leaves the threat of deflation as a possibility.

wangcblg · #**524** (**permalink**) 04-02-2009, 10:44 AM

Hello,
There is a lot of FX options news in DailyFX+. Is there anybody who can help me understand figures in following news quoted below?

"25 delta risk reversals allegedly traded 6.7 JPY calls on USD 350mln a leg. 5 year 120"s also traded as we mention in earlier comments at 9.0 on USD 300mln. Big Trade yesterday as reported at the time - 5 year 103"s at 8.65 on USD 250mln, this along side 5 year atmf at 11.35 from 11.25 in Asia Wednesday (5 year atmf currently 11.25/11.4)".

Thank you so much!

Bin

John Rivera · #**525** (**permalink**) 04-08-2009, 10:57 AM

The BoE will announce its monthly rate decision tomorrow and is expected to keep rates unchanged at 050%, which is no surprise since there isn't much room to go lower and it would have minimal impact. Since , the central bank doesn't issue a statement following non-action we may not see the event generate a great deal of volatility. We will have for the BoE to release their minutes the following week to get an insight into future policy decisions. However, if the MPC takes this time to announce further quantitative easing measures then we may see the pound weaken on the announcement.