Month: November 2009

Market Movers of the Day

Asia-Pacific

Japanese All industry activity down -0.6% MoM

Japanese Leading Economic index flat at 86.4

Japanese Coincident Index at 92.7

Europe

Swiss trade balance strong at 2.46B

UK M4 level rises by 11% YoY surprising for the better

UK Public sector borrowing at £11.4B

UK Retail Sales up by 0.4% lower than expected

Americas

Foreign investment in Canadian Securities up to $13.59B for September

Canadian investment in foreign securities up to $4.8B

Canadian Leading indicators up 0.7% MoM

US Leading Indicators up 0.3% MoM less than expected

US Intial Jobless Claims at 505K

Philadelphia Fed manufacturing survey up to 16.7

The Overall Sentiment

Forex

After a slight retreat the Dollar regained momentum once again as growth bets seem slightly ahead of economic data. Economic data in the US and Europe was rather positive with US initial Jobless claims holding steady at 500k and US leading indicators index rising 0.3% as lower rates supported growth. But nor the positive economic data nor the projection of 2010 growth by the Treasury Secretly was able to lift sentiment. The fears the US housing market will weigh on the US economy continued to loom and pushed the dollar higher in broad profit taking pullback. The Euro ended the day around 1.49$ and the Sterling closed the day around 1.665$ marking a strongly bearish.

Equities

Sentiment was rather negative with benchmark indexes on in the red with dominant profit taking almost across the board.  The global bearish sentiment was led by weakness in the resources sector with Alcoa falling close to -4% in the US and in the UK Rio Tinto was lower by -.3.8%.At the day’s end the Dow shed    -0.9%, the S&P was lower by -1.34% and the FTSE fell by -1.39%.

Commodities

Gold continued to perform well and although retreat slightly to 1140$ an ounce it later rebounded higher still close to its historical record at 1150$.Silver hovered slightly below the 19$.While precious Metals were supported by lower rates expectations Oil sank lower amid lower growth expectations settling around 77.5$ a barrel.

The Day Ahead

The opening event for markets will be the BoJ rate decision in Japan with investors largely expecting no change in key rates as economic conditions in Japan remain fragile. Investors will follow the BoJ rhetoric carefully and will be keen to figure wither the BoJ will go back into QE measures as deflation prissiest and keeps salaries and business under pressure. Any statement in that context could affect the Yen dramatically with Yen potentially encountering large bids. In Europe German PPI will reflect on inflationary pressures in the EU nevertheless the broad sentiment in Europe and the US is expected to be lead by Equities and the Dollar. A high dollar has the potential to pull markets back into red territory once again.

Technical Analysis

EUR/GBP

Bullish Scenario– A close above 0.9120 would signal the pair has broken the bearish channel and is ready to resume the major bullish trend.

Target A-0.935

Target B-0.947

Bearish scenario– A break of the 0.88 zone would lead to retest lower support levels

Target A-0.87

Target B-0.845

Daily Forex Market Analysis provided by eToro

Disclaimer: Trading in the Foreign Exchange market might carry potential rewards, but also potential risks. You must be aware of the risks and are willing to accept them in order to trade in the foreign exchange market. Don’t trade with money you can’t afford to lose.

© 2009 eToro Blog.

By Adam Hewison – Is the S&P about to fall out of bed or is it headed higher?

In my latest video I hope to answer those questions and show you what I think could happen to this market in the near-term.

There is a fascinating cycle at work that I want to share with you. If this cycle remains in effect, we could be looking at the beginning of a turn-down for this index.

See the New Video for free here….

As always our MarketClub videos are free to watch and there is no need to register.

All the best,
Adam Hewison
President, INO.com
Co-creator, MarketClub

By Adam Hewison – The gold market continues to steam roll ahead as it gets closer to our $1,300 target zone.

As we have stated before, gold is in a fully fledged bull market and sharp pullbacks are to be expected. This is not to say the bull market is over; it is more to say that pullbacks should be looked upon as opportunities to add to or initiate new positions.

In my latest video I give you an idea of what I think is going to happen to this market in the short-term and long-term.

Watch the New Gold Video Here…

As always our MarketClub videos are free to watch and there is no need to register.

All the best,
Adam Hewison
President, INO.com
Co-creator, MarketClub

By Gary Grimes

Please understand that this article is about more than safeguarding your money; it’s about saving you headache and heartache. It’s about giving you peace of mind.

Before I explain, please allow me to ask a few questions:

• Have you given much thought about the money in your banking accounts lately? Do you know if it’s safe?
• Have you thought about what might happen if your bank fails?
• Did you know you could be left in the lurch for days, weeks, even months before you get your money back from the FDIC?
• What happens if the FDIC can’t cover your funds?
• How do you find a safe bank to protect your deposits right now?

I hope you’ve given these questions some serious thought.

I have to be honest: These questions were about the farthest things from my mind until about a year ago, when I downloaded the free “Safe Banks” report from my colleagues at Elliott Wave International. At first, the report scared me: I thought, “Oh My Gosh! I could lose all of my money if my bank fails. What would I do?”

But as I read on, I figured out that the report was not only about making my money safe; it was about giving me peace of mind.

If you’ve read any of the following news items, perhaps you understand the fear of learning your money might not be safe. Here’s a recent story from Bloomberg:

Sept. 24 (Bloomberg) — In May, the FDIC said it was projecting $70 billion of losses during the next five years due to bank failures. The agency said it expects most of those collapses to occur in 2009 and 2010.

The FDIC’s problem is that it didn’t collect enough revenue over the years to cover today’s losses. The blame lies partly with Congress. Until the law was changed in 2006, the FDIC was barred from charging premiums to banks that it classified as well-capitalized and well-managed. Consequently, the vast majority of banks weren’t paying anything for deposit insurance.

Of course, we now know it means nothing when the FDIC or any other regulator labels a bank “well-capitalized.” Most banks that failed during this crisis were considered well-capitalized just before their failure.

By the end of 2009, more than 130 banks will have failed. Most depositors will have little clue their bank was even at risk. Worse yet, the string-pullers in Washington are doing everything in their power to hide information about the safety of your bank from you.

So far, the FDIC has had enough money to cover insured depositors. But that money is quickly running out.

Just last week, the FDIC voted to mandate early payment of insurance premiums to help cover at-risk banks. But only time will tell if this move will provide the funds needed in the years ahead. Here’s what the Associated Press reported on Thursday, Nov. 12:

WASHINGTON (AP) — U.S. banks will prepay about $45 billion in premiums to replenish a federal deposit insurance fund now in the red, under a plan adopted Thursday by federal regulators.

The Federal Deposit Insurance Corp. board voted to mandate the early payments of premiums for 2010 through 2012. Amid the struggling economy and rising loan defaults, 120 banks have failed so far this year, costing the insurance fund more than $28 billion.

Worse yet, three more banks failed the very next day, Friday, Nov. 13.

This is a very real problem and a direct threat to your money. It’s more important now than ever to personally ensure the safety of your bank. The free 10-page “Safe Banks” report can help. It includes the very latest bank safety ratings from the third quarter of 2009 to help you prepare for what’s still to come this year and next.

Inside the revealing free report, you’ll discover:

• The 100 Safest U.S. Banks (2 for each state)
• Where your money goes after you make a deposit
• How your fractional-reserve bank works
• What risks you might be taking by relying on the FDIC’s guarantee

Please protect your money. Download the free 10-page “Safe Banks” report now.

Learn more about the “Safe Banks” report, and download it for free here.

Source: ForexYard

The EUR advanced on the U.S dollar Wednesday, but failed to reach the $1.50 mark as investors zeroed in on a Fed official’s comment suggesting key interest rates could remain low until 2012. Federal Reserve officials were quoted saying that the Fed could keep short-term fed funds rates at near-zero until early 2012. The ultra-low rates weigh on the U.S dollar, as investors use the buck to fund investments in higher-yielding assets.

Economic News

USD – Dollar Retreats after 3 Week’s Rally

The U.S dollar advanced against the EUR Thursday on speculation U.S. investors are bringing back overseas funds toward year-end and traders cut bets the greenback will weaken. The U.S. currency also gained on speculation traders trimmed short positions after it failed to weaken beyond $1.50 per euro, according to analysts.

The Dollar rose to $1.4938 per EUR from $1.4963 yesterday. The greenback also climbed to $1.6714 per Pound from $1.6749.However the U.S. currency may weaken before a government report today forecast to show manufacturing in the Philadelphia region expanded for a 4th month, boosting demand for higher-yielding assets. The USD is unlikely to advance against the EUR until the Fed signals that it’s prepared to increase Interest Rates.

The Federal Reserve Bank of Philadelphia will report today that its economic index rose to 12.2 this month from 11.5 in October, according to economists. A positive reading signals expansion, and may support the Dollar further.

EUR – The EUR Pairs Gains after U.S Weak Data

The EUR pared some gains against the U.S dollar on Wednesday after data showed tame underlying U.S. inflation and a decline in housing starts last month, suggesting a U.S. recovery will be a slow one.

Slow economic growth in the U.S could stall a global recovery, and that can prompt investors to pare risky trades in higher-yielding currencies and assets. The European currency dipped briefly to $1.4839 from about $1.4850, though it remained 0.5% firmer on the day on the view that U.S. Interest Rates will remain low into 2010.

The British pound depreciated for the first time in 5 days against the EUR, weakening 1% to 89.38 pence. The Pound also dropped vs. the U.S dollar 0.4% to $1.6744 today.
The Sterling fell for a 3rd day versus the U.S dollar after the Daily Telegraph said U.K. lenders are in a worse state than those elsewhere, citing the world’s largest credit-checking company.

JPY – Yen Advances on Investors’ Demand for Safety

The Japanese yen rose against all 16 of its major counterparts as signs that Japan’s largest banks are facing pressure to raise funds spurred investors to bring back earnings on assets abroad. Japan’s currency strengthened as Asian stocks slipped.

The JPY strengthened against the EUR on speculation European banks will disclose more credit losses, boosting demand for the relative safety of the Japanese. The Yen climbed to 133.10 per EUR from 133.64 yesterday. It advanced to 148.90 per Pound from 149.58, after earlier rising to 148.78, the highest level since Nov. 12.

Crude Oil – Oil Rallies for a 3rd Day on Weak Dollar

Crude Oil prices rose for a third consecutive session, as government data showed a surprise drop in U.S. crude inventories and as the U.S. dollar turned lower, lifting dollar-denominated commodities prices.

Crude inventories fell modestly last week as imports declined and demand ticked up, the Energy Information Administration’s (EIA) petroleum data showed Wednesday. The weekly EIA data also showed U.S. crude imports fell 0.9% to 8.58 million barrels a day, and total petroleum demand rose 1% to 18.5 million barrels a day. While demand was higher than a week ago, it’s still down by more than 2% from a year ago.

Also supporting Oil prices, the U.S dollar weakened after a report showed new U.S. home construction slowed much more than forecast last month, while consumer prices rose more than expected. Crude oil prices are denominated in U.S. dollars, so a weaker dollar makes the commodity less expensive for investors holding other currencies. In addition, commodities have benefited from a dollar carry trade, whereby investors borrow cheap dollars to invest in hard assets.

Technical News

EUR/USD

The daily chart is showing mixed signals with its RSI fluctuating at the neutral territory. However, the hourly chart’s RSI is already floating in the oversold territory indicating that a bullish correction might take place in the nearest future. When the upwards breach occurs, going long with tight stops appears to be preferable strategy.

GBP/USD

There is a fresh bullish cross forming on the 4-hour chart’s Slow Stochastic indicating a bullish correction might take place in the nearest future. The upward direction on the hourly chart’s Momentum oscillator also supports this notion. Going long with tight stops might be the right strategy today.

USD/JPY

The typical range trading on the hourly chart continues. The 4-hour chart’s RSI is floating in neutral territory. However, the weekly Chart’s RSI is already floating in the oversold territory indicating that a bullish correction might take place in the nearest future. Going long with tight stops may turn out to be the right choice today.

USD/CHF

The pair has been range-trading for a while now, with no specific direction. The Daily chart’s Slow Stochastic providing us with mixed signals. All oscillators on the 4 hour chart do not provide a clear direction as well. Waiting for a clearer sign on the hourlies might be a good strategy today.

The Wild Card – Gold

Gold prices rose significantly in the last month and peaked at $1141.25 for an ounce. However, the daily chart’s RSI is floating in an overbought territory suggesting that a recent upwards trend is loosing steam and a bearish correction is impending. This might be a good opportunity for forex traders to enter the trend at a very early stage.

Forex Market Analysis provided by Forex Yard.

© 2006 by FxYard Ltd

Disclaimer: Trading Foreign Exchange carries a high level of risk and may not be suitable for all investors. There is a possibility that you could sustain a loss of all of your investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with Foreign Exchange trading.

Europe

Europe’s current account came out worse than expected at -5.4b

England’s MPC minutes showed uncertainty going forward

England’s CBI industrial Trends Orders improved but came out at negative 45

To catch up on the UK challenge go to:
http://www.etoro.net/forex-news/uk-challenge-first-update-7595.html

Asia

Japan’s machine tool orders dropped by less than expected at -42.5

Americas

Housing Starts increased by less than expected (0.53m)

Building Permits climbed by just under expectations at 0.55m

CPI increased by 0.3%

Forex + Commodities

It was the commodity market that took center stage yesterday as the Dollar dropped due to disappointing economic data from the U.S. Already during Asian hours the Dollar had lost its ground against counterparts, allowing Gold and Silver to climb to new levels. Gold the current leading commodity hit a new high for 2009, closing the session just under $1150. Silver, a commodity that has recently been lagging, soared higher throughout the session, but lost its steam as it ran into trend line resistance.

From a technical point of view, silver is now at the top of its trend line within its major uptrend. Even though indicators are still showing relative strength, current levels could act as resistance, especially if the broader market fails to continue higher.

Economic data helped to spark buying on the commodity market yesterday, as inflation numbers from the U.S showed that despite the slow recovery, prices are starting to increase. One must note that even though higher prices are often thought of as a good thing, especially when they rise due to healthy consumer consumption, rising prices along with low consumer consumption can often result in market fear, sending investors into safe-haven assets such as Gold, to hedge against inflation.

Consumer prices rose 0.3% in October with prices excluding food and energy rising 0.2%. In addition, the housing market continued to disappoint, releasing weaker than expected housing start and building permits. The numbers came out at 0.53M and 0.55M, respectively.

On the different currency pairs, Dollar counterparts managed to gain ground throughout the session, but failed to present any major moves. The GBP/USD presented an interesting session as the BOE released its minutes, showing that even though the members voted to leave rates at a low of 0.5%, not all the MPC members were in sync regarding future monetary actions. The minutes showed that policy makers are still debating whether the U.K’s economy will require further stimulus or not. Following the release, the markets took the news more than lightly and presented extreme volatility. The GBP/USD bounced back and forth by over 60 pips, before settling down to close with a minor loss.

The EUR/USD finished the session with a mild gain, while the Australian Dollar finished the session unchanged.

Equities

On the Stock market the major indices finished the session with an average loss of 0.2%. The Nasdaq dropped the most out of the three major indices and closed down by -0.48%. Technology companies slid throughout the session after profit forecasts at Auto desk and Salesforce.com came out worse than analysts were expecting. Even though the sector weighed on the market throughout the session, financials helped to cushion the fall, providing support towards the second half of the trading day.

From a technical point of view the S&P500 is still trading within its uptrend but finished the session with a doji candlestick – one that normally indicates uncertainty in the markets.

Market Data Ahead

Looking forward, England will start the morning off with a bang, releasing its Retail sales result. The numbers are expected to show an increase and come out at 0.6%. Throughout the session the U.S will take the stage and release its initial Jobless claims and Philadelphia Fed manufacturing Index. Even though the jobless situation isn’t expected to change, the manufacturing sector is expected to show an improving situation and come out with a 12.5 figure, compared to an expected 11.5

Daily Forex Market Analysis provided by eToro

Disclaimer: Trading in the Foreign Exchange market might carry potential rewards, but also potential risks. You must be aware of the risks and are willing to accept them in order to trade in the foreign exchange market. Don’t trade with money you can’t afford to lose.

© 2009 eToro Blog.

By CountingPips.com

U.S. housing starts and building permits decreased unexpectedly in the month of October while housing completions increased according to data released by the Commerce Department on new residential construction. Housing Starts fell by 10.6 percent in October to a seasonally adjusted annual rate of 529,000 starts following an annual rate of 592,000 in September.  October’s data was worse than economic forecasts predicting a rise for the month to a 600,000 starts pace.

Building permits statistics, used as a predictor of future construction, showed a seasonally adjusted annual rate of 552,000 permits in October which is a decline of 4.0 percent when compared to September. Building permits also failed to match forecasts expecting permits to number approximately 580,000 annually.

Housing Completions for October increased when compared to September as completions rose to an annual rate of 740,000 privately-owned housing completions. This is an increase of 1.9 percent from September’s completion totals.

US Consumer Prices increase in October

U.S. Consumer Prices increased for the third month in a row as energy price increases helped push the index higher according to a report released today by the U.S. Department of Labor. The Consumer Price Index, a key measurement of inflation, increased by 0.3 percent in October following up an increase of 0.2 percent in September.

The annual rate of consumer prices, despite the monthly gain, fell by 0.2 percent when compared to October 2008. The annual rate of inflation in September had registered 1.3 percent decline. Rising energy prices were a significant contributor in the increased inflation as the report showed that energy prices rose by 1.5 percent and gasoline prices increased by 1.6 percent for the month. Food prices rose by just 0.1 percent in October.

The core inflation reading, excluding food and energy prices, increased by 0.2 percent for the month surpassing market forecasts expecting a 0.1 percent gain. The annual rate of core inflation increased by 1.7 percent for June following up an increase of 1.5 percent in September.

US Dollar mixed in Forex Trading

The U.S. dollar has been mixed in forex trading today against the other major currencies. The dollar has been gaining today versus the British pound, Canadian dollar, Japanese yen and Australian dollar while falling against the euro and Swiss franc and trading almost unchanged versus the New Zealand dollar at 4:04 pm EST according to currency data by Oanda.

The US stock markets have had a negative session so far today with the Dow Jones falling by roughly 11 points, the Nasdaq decreasing 10.64 points and the S&P 500 showing a 0.53 point slide.  Oil has traded higher by approximately $0.46 to $79.60 while gold has risen by $2.40 to $1141.20 per ounce.

Crude oil rose above$80 a barrel on Wednesday as the dollar weakened, prompting investors to once again buy into commodities. However, as I will demonstrate below, Crude Oil may very well be heading for a reversal later today. This might be a good opportunity for forex traders to enter the trend at a very early stage and a great entry price.

• The indicators used are the Slow Stochastic, RSI and MACD.

• Point 1: There is a “doji” candlestick that has formed on the chart, indicating that a reversal should take place.

• Point 2: The Slow Stochastic indicates a bearish cross, signaling that the next move may be in a downward direction.

• Point 3: The Relative Strength Index (RSI) indicates that the price of this cross currently floats in the overbought territory, signaling downward pressure.

• Point 4: The MACD indicates an impending bearish cross, which may signal a downward movement is going to occur in the near future.

Crude Oil 4-Hour Chart

By Fast Brokers – The USD/JPY is continuing its consolidation between our 1st and 2nd tier uptrend lines as the S&P futures hover just above their psychological 1100 level.  Not much has changed since yesterday despite another wave of negatively mixed U.S. econ data.  The story remains the S&P’s resilience above 1100 despite econ data indicating a slowdown in the pace of America’s economic recovery.  If the S&P can manage to move higher regardless of disappointing data, then another wave of broad based Dollar weakness may kick-in, thereby weakening the USD/JPY.

Meanwhile, investors shouldn’t forget that Japan’s Prelim GDP topped expectations by 5 basis points to kick off the week.  Therefore, one may expect investors to send the USD/JPY lower due to a more favorable outlook for the Yen as compared to the Dollar.  However, the USD/JPY is continuing to hold strong above our 1st tier uptrend line since the currency pair is drifting closer to a key retracement towards October lows.  Regardless of the USD/JPY’s present resilience, there is still a long-term downtrend at play and our technical cushions are wearing thin.

Technically speaking, the USD/JPY is presently fighting to stay above our 1st and 2nd tier uptrend lines.  Should our 1st tier give way, the currency pair still has 10/2 lows along with October lows serving as technical cushions.  As for the topside, the USD/JPY faces multiple downtrend lines along with the highly psychological 90 level.  Therefore, quite a few topside challenges are in place.  Meanwhile, investors should continue to monitor the S&P’s interaction with 1100 as well as the reaction of equities to tomorrow’s weekly Unemployment Claims release.

Present Price: 89.18

Resistances: 89.31, 89.41, 89.54, 89.68, 89.83, 89.89, 90.07

Supports:  89.15, 88.99, 88.85, 88.73, 88.58, 88.44

Psychological: 90, November and October Lows

Market Commentary provided by Fast Brokers.

Disclaimer: FastBrokers’ market commentary is provided for information purposes only and under no circumstances should be regardedneither as an investment advice nor as a solicitation or an offer to sell/buy any financial product. FastBrokers assumes no responsibility or liability from gains or losses incurred by the information herein contained.

Risk Disclosure: There is a substantial risk of loss in trading futures and foreign exchange. Please carefully review all risk disclosure documents before opening an account as these financial instruments are not appropriate for all investors.

By Fast Brokers – The Cable is consolidating after briefly trading beyond November highs on Monday.  Investors are presently digesting the BoE Meeting Minutes released earlier today.  The minutes revealed that although seven members of the BoE voted for the 25 billion Pound QE injection, one member vote for non-action and the other for a larger 40 billion Pound injection.  Therefore, divisions of opinion may exist in the BoE in regards to present and future monetary policy actions, thereby increasing investor uncertainty a bit.  However, if pricing data points, such as Tuesday’s CPI and RPI, continue to rise while unemployment falls the BoE may choose a less dovish monetary policy stance in the future, thereby strengthening the Pound relative to the Dollar over the medium-term.  U.S. data has been underperforming as of late and the Fed’s loose monetary stance could be in place for quite some time.  As for the time being, the Cable has had trouble breaking 11/09 highs and our 4th tier downtrend line.  Meanwhile, the EUR/USD remains locked beneath its highly psychological 1.50 level.  Therefore, the Cable has yet to receive the positive boost it needs to approach its own highly psychological 1.70 level.

Technically speaking, investors should continue to monitor the Cable’s interaction with our 4th tier downtrend line since it runs through 11/09 highs.  The GBP/USD faces light near-term historical resistance between present price and the psychological 1.70 level.  In fact, we had to trace back to 2003 levels to find more substantial resistances.  Hence, the Cable could be in for more extensive topside movements should fundamentals and U.S. equities cooperate.  Speaking of which, investors received another wave of negatively mixed U.S. econ data and the S&P futures are having trouble creating some topside separation from their highly psychological 1.70 level.  As a result, the economic fundamentals are not helping out the Cable’s uptrend for the time being.  However, Britain will release Retail Sales tomorrow along with Public Sector Net Borrowing.  A positive Retail Sales number could help the uptrend’s cause.  Meanwhile, the Cable is continuing a consolidative pattern while slowly drifting back below 11/09 highs, meaning there’s a potential for downward forces to kick in.  As for the downside, the Cable still has multiple uptrend lines serving as technical cushions along with 11/16 and 11/12 lows.  Furthermore, the psychological 1.65 level could work in the Cable’s favor should conditions deteriorate.

Present Price: 1.6795

Resistances: 1.6808, 1.6828, 1.6849, 1.6875, 1.6896, 1.6913, 1.6935

Supports: 1.6778, 1.6753, 1.6730, 1.6694, 1.6664, 1.6615, 1.6594

Psychological: 1.70, 1.65 November and August Highs, November Lows

Market Commentary provided by Fast Brokers.

Disclaimer: FastBrokers’ market commentary is provided for information purposes only and under no circumstances should be regardedneither as an investment advice nor as a solicitation or an offer to sell/buy any financial product. FastBrokers assumes no responsibility or liability from gains or losses incurred by the information herein contained.

Risk Disclosure: There is a substantial risk of loss in trading futures and foreign exchange. Please carefully review all risk disclosure documents before opening an account as these financial instruments are not appropriate for all investors.