Posted 23 hours ago: In our April 18 article we warned how April showers, could bring May Bearish Flowers (see here: http://ashraflaidi.com/ content/ images/ articles/ SPX%20April%20Apr%2011.JPG_640W.gif) Stocks are now down nearly 7%. In the SP500/VIX ratio chart (also in the article here: http://ashraflaidi.com/ articles/ april-fears-ahead-of-fed-spain-china.asp ), we warned the ratio could lose further as the bears drag down the index & volatility pushes up across the board. The ratio is now down 20% Cycles do NOT always recur, but when they do in these highly watched indicators, the downside could be severe. For our latest Premium Intermarket Insights; Tuesdays Intermarket Insights 6 charts are on EURUSD Option Volatility, EUR Volat vs EUR cash, S&P500, Dax Weekly, Gold Monthly vs. Weekly. Shorts in US crude are in progress. Subscribers can click here for direct access: http://ashraflaidi.com/products/sub01/access/?a=636 Nonsubscrobers can click here: http://ashraflaidi.com/products/sub01/ - May 16 14:28

Posted yesterday: UK labor market improves; GBP drops as BoE slashes growth forecast to 0.8% from 1.2%; Eurozone CPI unchanged; German and French bond auctions; gold at key support. Market turns to building permits, housing starts, industrial production, Draghi's speech and FOMC meeting minutes. The Premium gold & AUDUSD shorts hit all targets, while USDCAD long was stopped out. EURUSD not quite hit the 1.2680 target. More detail on the 6 Premium charts and other ideas is found below.

The greenback trades higher against GBP but unchanged against most other majors. European equities are trading within -1% and +0.2%.
UK labor market improved marginally as the claimant count declined 13.7K in April after rising 3.6K in March, the claimant count rate remained at 4.9% and the ILO unemployment rate ticked down to 8.2% from previous 8.3%. Nevertheless, the GBP declined after the inflation report was released and BOE governor King started his press conference. The BOE now expects inflation to decline to the 2% target in mid 2013 which is six months later than originally projected while the GDP will not reach pre crises levels till 2014. The BOE also noted that the Eurozone crisis continues to be the biggest threat to the UK recovery and it sees the possibility of a "disorderly" outcome for which contingency plans are being discussed. GBPUSD fell to 4 week low at 1.5889.

Eurozone April CPI was unchanged at 2.6% (core remained at 1.6%) and March trade surplus widened to EUR 4.3 bln from EUR 4.0 bln as imports were unchanged while exports rose 4%.

Spanish 10 year yield rose to 6.51% earlier during the session but has declined to current 6.32%. German 10 year bond auction resulted in a lower yield (1.47% vs. previous 1.77%) and improved cover (1.5 vs. 1.1) but fell short of a target (EUR 4.1 bln vs. 5 bln). France reached the upper end of its EUR 7-8 bln target as it sold bonds totaling EUR 7.99 bln.

Gold trades in the middle of a key support zone 1520-1550 where a sovereign interest is expected. Silver too trades at a similarly important zone around 27.40.

The US session starts at 8:30 am ET with April building permits that are seen lower at 0.73M from previous 0.75M and housing starts that are expected to rise to 0.69M from 0.65M.

Capacity utilization and industrial production are due at 9:15 am ET and they are both seen higher in April at 78.9% from 78.6% and at 0.6% from 0% respectively.

Markets are also likely to respond to the ECB president Mario Draghi's speech on monetary policy that starts at 10:00 am.

The key event will be the FOMC meeting minutes that are due at 2:00 pm. Considering the statement and the press conference on 4/25 it is unlikely that the markets will be surprised. Given the slightly improved FED projections, today's minutes are not likely to reverse the recent USD uptrend.

Tuesdays Intermarket Insights 6 charts are on EURUSD Option Volatility, EUR Volat vs EUR cash, S&P500, Dax Weekly, Gold Monthly vs. Weekly. Shorts in US crude are in progress. Subscribers can click here for direct access: http://ashraflaidi.com/ products/ sub01/ access/ ?a=636 Nonsubscrobers can click here: http://ashraflaidi.com/ products/ sub01/

Patrik Urban - May 16 08:08

Posted yesterday: Last-ditch efforts to form a Greek government failed and an election call is imminent. The move was well-anticipated but the euro fell hard, dropping to 1.2730. Japans tertiary index fell, while Australia Westpac consumer confidence rose but remained below Octobers level. There 6 charts in tonights Premium Intermarket Insights, with new ideas in EURUSD and a change of focus in US crude oil. AUDUSD, USDCAD and gold trades remain in progress. See more below

The market not likely to be caught off guard by the failure of Greek political talks but the announcement pushed the euro over the edge, which today was at 1.2830. It was a steady slide a full cent lower from there.
US economic data was inconsistent. April retail sales rose 0.1% compared to +0.2% expected and CPI was in-line at 2.3%. The market focused on upbeat readings on the Empire Fed and NAHB home builders index. These numbers werent good enough to spur optimism about the recovery but were good enough to beat back QE3 expectations and spark a dollar rally.

The broad USD gains were also fuelled by a technical breakout in the Dollar Index and commodity-price drops. Gold and oil fell to a 2012 lows while copper fell to the lowest since January.

European bond markets remain in shambles amidst a growing sense that a Greek eurozone exit is inevitable. Japan March machine orders 2.8% vs a median forecast of -3.2%, while the Tertiary Index was -0.6% m/m vs unchanged in Feb.

Australia May Westpac consumer confidence +0.8% m/m to 95.3, remaining below Octobers level. Westpac expects the RBA rate cut to be brought forward to June.

Today's Intermarket Insights has 6 charts , including EUR volatility, S&P500, Dax and Double Charts in Gold Weekly & Monthly. Subscribers can click here for direct access: http://ashraflaidi.com/ products/ sub01/ access/ ?a=636 Nonsubscrobers can click here: http://ashraflaidi.com/ products/ sub01/

-AB - May 15 20:57

IMT Archives