The Fright Subsides, Eyes Back on Japan
After four months of exuberance markets had had a few hours of pure fright on Thursday but the near-panic that gripped Japan never spread beyond its borders. The dollar and yen have drifted lower as fears subside. DRAGHI'S speech hailed the effectiveness of the bond buy program on the market but remained concerned with the macroeconomic weakness in the periphery. There were no refefences to interest rates. BOJ Governor Kuroda speaks in the upcoming session when all eyes will be fixed on Japanese markets. Added 1 USDJPY, 2 New EURJPY, 1 new USDCAD and moved the stops and targets in both of our existing EURUSD trades ahead of tomorrow's release of German Q1 GDP and IFO. All of this and the silver as well as the Aussie trades are in the latest Premium Insights.
Markets were on edge heading into US trading but two solid data points helped to calm nerves. First, initial jobless claims were at 340K compared to 345K expected and then the May Markit US manufacturing PMI reading was 51.9 compared to the 51.8 consensus. The numbers were a reminder that nothing had changed in the economy even with the Nikkei plunging 7.3%.
Later some minor numbers on US housing were also a reminder of the latent strength in that part of the economy.
Fed speakers also re-iterated a stance very close to neutral. San Francisco Fed President Williams said that even if the Fed tapers, it could later hike purchases. Bullard said tapering should only be done in relatively small increments.
Aside from the race to the exits in yen shorts, other markets took a nonchalant view. Commodity currencies climbed throughout US trading and the S&P 500 finished the day only 0.3% lower. It's too early to sound the 'all clear' signal but an upbeat mood in Asia could lead to a fresh round of optimism.
One factor to watch is at 0255 GMT when Bank of Japan leader Kuroda speaks at a conference on the future of Asia. Kuroda may wish to address the weakness in the Japanese bond market and the volatility in stocks.
u didnt give any answer
what about now that Sir King is finishing his two terms and carney is arriving on board the NEwfoulands pirates coast.
Reagan always said "we will conquer Canada with sweet".
cashin' in swiss bank account?
Our house building initiative is still under debate, we don't want to repeat the sub prime debacle in a different guise. 95% mortgages must be incredibly tightly scrutinised for affordability and job security or the tax payer will yet again suffer the consequences of default. I have no faith in regulators and credit reference agencies.
The US macro position is still subject to a monumental pile of debt plus a CB which is stuck with QE purchasing. Short term stats can be encouraging but underneath lies an ever increasing black economy. Companies employ part time to avoid the healthcare liability. Potential job seekers are happy to be part time to continue receiving food stamps and state healthcare cover plus black economy activities. They can earn far more remaining under the radar and take what the state readily giveth. The net result is reflected in lower tax receipts and the need for further austerity measures = tax increases, spending cuts = low growth environment for many yrs to come.
It all means Obama has cocked up.
daily we touched the res level at high 1.4807 probably by yesterday in line retail sales datas. Market is gonna digest this data probably by tomorrow or monday open. Before any reaction to this data cable is going to retrace to a range of support of 1.4489 and 1.4560. rom this pullback cable is heading back to this resistance in consolidation. SNB market intervention selling swiss franc is not gonna occur before this reistance is broken which shown in the chart has been mainly support then resistance. it will probably a whole week to broke this level.
we can see that retracement of the fib level combined with EW count give us on a 5' basis a test of the 161% ret fib. the final touched for this technical rebound should be around the 1.4654 after what we have on a closing timeframe 1.45200/100 at the 261% ret fib.
the price action is more of a result of SNB intervention on the market mainly through its 200 dealing counterpart that the uk data that are good but not as good as expected. All is played in the mortgage markets which like i told you is mainly driven bu massive buyout operation from national federal reserves. SNB through its shareholders is acting on behalf of the british pound and the 20% gold the BoE held in its vault on behalf of SNB and clients. Like said Bernanke yesterday the Fed will do to sustain the recovery in housing even though we have rental prices getting sustained at certain level by hedges funds like stated Senator Sanchez.
DAve is it a good explanation why i am positive on this economies.
buy till putnik