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Friday, February 8, 2013

Your forexlive.com ENewsletter

Link to ForexLive

A quick look around the markets.

Posted: 08 Feb 2013 01:47 AM PST

Sorry Ladies and Gents. In all the hubbub of the Yen moves and me putting together the piece below it’s easy to miss what else is going on.

It’s not much really.

EUR/USD has continued is slow meander up through 1.3400 to 1.3426. There’s some minor resistance around 1.3445/50 and then 1.3460/70. We’ve got the hourly 55 & 100 ma’s 1.3486 and then 1.3511.

GBP/USD  A bit more movement here as we broke the H1 200 ma at 1.5738 to a high of 1.5752. We’re back down to the 200 ma at the moment.

AUD/USD Again it’s up at the highs for the session at 1.0328 after breaking the H1 55 ma at 1.0310. Next targets are the 100 ma at 1.0355 and some minor resistance at 1.0362

 

 

He said, she said

Posted: 08 Feb 2013 01:30 AM PST

As we all know all it takes is a couple of lines from politicians and business leaders to put a big hole in your bank balance. It’s very easy to suddenly get caught up in the moment and start thinking that the trend or sentiment has changed. You see your chart indicators broken, levels breached and it all looks a mess. Just take the current moves unfolding in the Yen pairs. When you get such moves you sometimes just need to step back and look at the bigger picture.

Let’s take this case and the cause for the moves.

  1. Long Japanese weekend
  2. Illiquid market
  3. Profit taking
  4. Possible stop hunting
  5. Aso and Nissan comments

All this has led to 150 & 200 pip drops in the major and crosses.

So now we take a step back and look at a much wider long term picture. What is the Japanese situation? ( and this is a very basic simplification)

  1. Abe took back power and promised some bold policies. This is why we are up 1500 odd pips (USD/JPY) from before the election.
  2. Despite all the noise in between, the next big event in Abe’s plan is the BOJ governor. If he gets his man stage two of the plan is in place.
  3. The July Upper house elections. If Abe gets control of the Upper house then he can implement his plans much easier. Stage three will be complete.

It’s these three points that have us trending the direction we are. This is where the real market focus is. Nothing that has happened today has changed that. When you take a step back you can see the moves clearly for what they are, in this case just wild swings. The key to taking advantage of such moves is to keep your focus on the long term picture.

Italian Jan IP +0.4% from 0.3% exp

Posted: 08 Feb 2013 01:01 AM PST

A nice gain of 1.5% from last reading. Improving economic figures are always useful to take into an election campaign.

USD/JPY continues to fall

Posted: 08 Feb 2013 12:27 AM PST

We’re tanking very hard here. Through minor support levels at 92.69 & 92.32 and busting the hourly 200 ma at 92.25. Low so far 92.17.

Crosses;

EUR down to lows of 123.50

GBP the low 5 pips shy of 145.00

It’s looking a bit hairy out there so take care.

Update: Boing!! Quick bounces all round. 50 pips in the crosses and 40 in the USD/JPY.

I’m not seeing any news for the moves (though that doesn’t mean there isn’t any) so one can assume the market is lacking liquidity. Looking like some classic stop hunting. If the moves carry on lower that would suggest there is some heavier selling interest.

Update 2: Fin min Aso saying that maybe the Yen weakness has gone to far.

I bet there’s a few bulls who’ll be adding a few more letters to his name, namely s,h,l & e ;-)

 

Swiss Adj retail sale 5.1% from 2.0%

Posted: 08 Feb 2013 12:20 AM PST

Strong adjustment. Looks like the shoppers have come home.

EUR/CHF trying to break 1.2300 but being rejected so far. A breakthrough will lead us to the hourly 55 & 100 ma’s at 1.2310-12

BOF: French economy to rebound Q1 2013

Posted: 08 Feb 2013 12:02 AM PST

DJ Newswire

In the banks monthly survey of business sentiment, GDP is forecast to rise 0.1% Q1 2013

The banks business sentiment indicator for industry rose to 95 in Jan from 94 in Dec which is still below the long term average of 100

 

USD/JPY

Posted: 07 Feb 2013 11:34 PM PST

Breaking below 93 and hitting some stops through 92.90

EUR & GBP crosses following.

GBP/JPY approaching 146

EUR/JPY down to 124.29 low.

The EUR & GBP majors are holding steady so it’s all about the Yen.

Update:

The slide continues USD/JPY down to a low and into support at 92.69

EUR/JPY hits a low of 124.16. GBP/JPY low of 145.81

German Dec trade bal +2bn from exp +0.2bn

Posted: 07 Feb 2013 11:02 PM PST

Not January figure as in my previous post. What happened to German efficiency? ;-)

Swiss Jan Unemployment Unchanged at 3.1%

Posted: 07 Feb 2013 10:48 PM PST

CHF pairs still asleeep.

Around the markets

Posted: 07 Feb 2013 10:38 PM PST

Not much to write home about early doors.

EUR/USD pretty flat over night and currently hogging the 1.3400 handle.

GBP/USD currently at 1.5726 up from 1.5703 through the night. Holding up quite well considering the battering sterling has taken the last couple of weeks, especially against the Euro. It’s as if it’s thumbing it’s nose East and saying “your turn now”

USD/JPY up at 93.25 from a low at 93.18. Feels like some of the sell off is profit taking ahead of the long weekend. If you don’t mind holding a trade over the weekend, any further decent gains in the Yen could hold a good dip buying opportunity. I’d personally leave it until late in the US session before trading.

AUD/USD Stubborn bugger isn’t it? It certainly makes hard work for the bears. We’re back around the 1.0300 level after an overnight dip to mid 1.0250′s

 

 

 

European economic releases Fri 8.02.2013

Posted: 07 Feb 2013 10:21 PM PST

  • 6.45 Swiss Jan Unemployment rate  exp +0.1% to 3.1%
  • 7.00 German Jan trade bal exp +0.2bn to 14.8bn
  • 8.15 Swiss Adj retail sales exp -0.9% to 2.0% y/y
  • 9.00 Italian Dec Ind prod exp +1.3% to 0.3% m/m
  • 10.00 Greek CPI  exp -0.1% to 0.7% y/y
  • 10.00 Greek Ind Pro prior -2.9% y/y

Full calendar here.

Trade Ideas

Posted: 07 Feb 2013 10:08 PM PST

Good morning everyone. Thank you Eamonn for your coverage.

If you have any trade ideas, drop them in here.

Thank you.

China Jan PPI/CPI Unch cpi

Posted: 07 Feb 2013 10:00 PM PST

Jan PPI -1.6% y/y

Jan CPI 2.0% y/y (m/m 1.0% from exp 0.9%)

ForexLive Asia Wrap: Chinese January trade data surprises to topside

Posted: 07 Feb 2013 08:54 PM PST

  • Japan December Unadjusted Current Account in at a deficit of 264.1B Yen (Market expected – ¥144.2Bn)
  • Japan December Seasonally adjusted Current Account at 98.1B Yen (Market expected ¥230.8Bn)
  • Japan's December Trade Balance deficit of 567.6Bn Yen (Expected was -560.6B Yen)
  • Japan January Bank Lending excluding Trusts +1.6% Y/Y (Market expected +1.1%)
  • Japan Q4 Housing Loans +3.1% Y/Y (Prior was +3.0%)
  • Australia: The RBA Statement of Monetary Policy was released, a more dovish tone (summary here)
  • China's January Trade Balance surplus of $29.2BN  (vs. expected of $22Bn) (Summary)
  • China January exports up 25% from a year earlier (expected was +17.5%)
  • China January imports up 28.8% from year earlier (expected was +23.5%)
  • Australia's Treasurer Wayne Swan spoke about the paltry amount the Mining Tax has collected

It was a quiet Asian session today ahead of a Japanese holiday on Monday and the Chinese New Year holidays next week in China, Hong Kong and Singapore.

AUD/USD tested the bids below 1.0260, and found plenty, but only managed to rally from there with the release of the better than expected Chinese January trade data. It was capped ahead of 1.0300.

EUR/USD, too, caught a bid on the Chinese figures, but in a very limited range, from 1.3385/90 to 1.3410/15.

The Yen had a quiet, range-bound day on low volumes ahead of the long weekend in Tokyo.

More from the WSJ: Japan Trade Figures Highlight Challenges

Posted: 07 Feb 2013 08:20 PM PST

  • Japan’s trade figures for 2012 were its worst since current tracking methods were brought in nearly 30 years ago
  • The country’s poor trade performance has become a central worry for Japan’s new government.
  • The figures are likely to pressure the nation’s central bank to take on greater monetary easing to help push the yen lower and thereby make Japan’s manufacturers more competitive against rivals from South Korea and Germany.

Nothing new in the article. But its going to an interesting debate at the G20 meeting in the middle of this month on currency movements.

Wall Street Journal (Gated – a news search on the headline may turn up something)

WSJ article: Fed’s Stein Sees Risks for Credit Markets

Posted: 07 Feb 2013 07:42 PM PST

A Federal Reserve official pointed to signs of overheating in some corners of the credit markets and raised uncomfortable questions for the central bank about how to address the trend if it continues.
Federal Reserve Board Governor Jeremy Stein said there isn’t an imminent threat to the wider financial system …

Mr. Stein’s comments are significant because they are among the strongest from a Fed official about risks developing in bond markets in the presence of low interest rates and because he raises the prospect that the Fed might, down the road, need to use tighter credit policies to deal with it.

Fed’s Stein Sees Risks for Credit Markets (Gated – a news search on the headline may turn up something)

This is not new news, but its in the Wall Street Journal now, so may have a wider impact.

China MIIT: Global Iron Ore oversupply to be more apparent in 2013

Posted: 07 Feb 2013 07:36 PM PST

  • Iron ore prices to fall in 2013

Comments coming across newswires

This will not be a positive for the AUD/USD

 

Australian Treasurer Swan addressing the media

Posted: 07 Feb 2013 07:15 PM PST

Swan is addressing the media again. Nothing of much difference so far:

  • RBA report today confirms patchy economy
  • Global conditions have made business cautious
  • The RBA still expects ‘sold’ growth
  • Production phase of mining boom is just ramping up
  • Lower interest rates in Australia to stimulate non-mining
  • Lower commodity prices, higher A$ hurting government tax revenue
  • Commodity prices are recovering, ‘but only in part’

Bloomberg article: China Denies Using Weapons-Targeting Radar on Japanese Ship

Posted: 07 Feb 2013 07:09 PM PST

China's Ministry of Defense said its ships didn't use weapons-targeting radar on Japanese naval forces last month, calling statements made by Japanese officials on the issue "irresponsible" and contributing to heightened tensions between Asia's two biggest economies.
Chinese ships used radar to closely monitor a Japanese military helicopter on Jan. 19 and to track the Japanese destroyer Yudachi on Jan. 30, and in both cases fire-control radar wasn't used, the ministry said in a statement posted on its website.

Oh dear …

Bloomberg

 

China Trade data – recap

Posted: 07 Feb 2013 07:03 PM PST

Exports grew 25 percent year-on-year in January versus a forecast of 17 percent in a Reuters poll, while imports surged 28.8 percent to comfortably beat a consensus call of 23.3 percent. January’s trade surplus was $29.2 billion versus a market expectation of $22 billion.

Tao Wang, China economist at UBS in Hong Kong, said the growth in imports was key for investors trying to assess the strength of demand in the domestic economy.
“It seems to me that imports were particularly strong and that reflects two things: one is that the domestic demand, in particular investment demand, is very strong. The second thing is that it seems that companies are restocking ahead of the Chinese New Year and ahead of the peak season in March and April,” she said.

There are concerns amongst economists, though, of the seasonal effects around the New Year – read the full article here: Reuters

And more here:

China's exports rose more than estimated in a January that had five more working days than last year, helping sustain a growth rebound in the world's second- biggest economy.

 


at 6:06 PM

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