Search

YEN STILL DOING IT as the mere sign of profit-taking in global bourses, sends yen crosses falling across the board. AUDJPY proved once again unable to break the trendline resistance of 77.70s, extending from the June 21 high. And with AUDJPY Daily stochastics showing a negative cross-over, prelim...

TODAYs GLOBAL EQUITY RALLY marks the importance of the 1040 support in the S&P500, which held up successfully in February, May flash crash and mid June, with the exception of 3 consecutive days in end of June. The fundamental catalyst for the buying was the rebound in Chinas manufacturing PMI as...

CANADA, CHICAGO & FOMC MINUTES, are due today. Canada Q2 GDP is expected to slow sharply to 2.5% q/q from 6.1%, which should prolong USDCADs return towards 1.0660s. Note 1.0670s acted as a consistent resistance over the past since late June and so a sharp slowdown will likely drive CAD shorts to...

The BOJ OPTED FOR easing than actual FX intervention, via expanding its 6-month fixed rate lending facility to 30 trln yen from 20 trln yen. The yen rose as a result of the confirmed absence of intervention. See previous IMT explaining why I continue to see no yen-selling intervention. Yen gained...

WHEN MARKETS TAKE A BREAK from the recent selloff, FX traders pick among USD, JPY and CHF as the safe haven currencies to sell. JPY is hit hardest on a combination of a bounce in Asia and European futures after the Jpns govt urged the Bank of Japan to ease the yen as part of an upcoming stimulus...

More disappointing US housing figures are unlikely to further boost USD on risk aversion because (i) prolonged US data deterioration bolsters the case for a fresh asset pruchases from the Fed; and (ii) of the latest upside surprise in German August IFO survey. While the latest 3-year high in...

ITS ONLY TUESDAY as JPY makes the transition from rising to soaring amid inaction from Japanese officials. Readers of this website have been warned of 81-80 in USDJPY since January before it was fashionable to do so. Cracks inside the FOMC about renewing QE, forecasts of a possible UK recession by...

AUSTRALIAN ELECTION DEADLOCK is having no particular AUD impact after a brief pullback in early Asian trade. We know markets don't like uncertainty, but such a close race was widely anticipated. Despite Gillard's plan to reduce Rudd's proposed resources tax to 30% from 40%, the tax remains a drag...

SATURDAY's AUSSIE ELECTIONS between Labours Gillard and Conservatives Abbott will be the closest Australia has seen since 1961. Although Gillard has proposed a watered-down version of the super tax on commodities from 40% to 30%, it remains unclear whether a Labour a victory will be negative for...

DATA DOUBLE PUNCH HITS MARKETS as US jobless claims jump by 500K (highest since Nov), Aug Philly Fed -7.7 (lowest since Jul 2009) put life back in the yen as risk aversion intensifies (S&P500 -1.6% testing 1075). USDJPY testing 84.80, AUDJPY eyes 75.50, EURCHF loses 200 pips now testing 1.3180...

YEN EXTENDS PULLBACK as markets stabilize, while CHF takes over from the Japanese currency, reminding us the Swiss safehaven is here to stay. The latest comments from Japanese officials about excessive yen moves have not been sufficiently potent as markets widely believed intervention will not be...

UPCOMING AUSSIE JULY JOBS REPORT (1:30 am GMT) may show further FUNDAMENTAL reason for the ensuing technical damage vs. USD and JPY. JUST LIKE LAST FRIDAY's CANADA JOBS data finally showed an unexpected jobs joss following series of robust employment figures, Australias July jobs figures could...

Why "Bearish Stochastic Divergences" are rare but effective? Here's Tuesday's AUDJPY chart alerting the divergence, and here's Wednesday's http://bit.ly/c5P153 A disappointing jobs report froom Australia on Thursday would accelerate those losses towards 75.50s......

BEARISH STOCHASTIC DIVERGENCE in AUDJPY as the cross stands vulnerable to prolonging losses on deepening risk aversion, especially after Chinas July imports were slower than expected. The daily AUDUSD chart shows a rare bearish divergence in slow stochastics, whereby the price action remains...

STOCKS EXTEND FRESH DOSAGE of pre-payrolls buying after US July ISM unexpectedly rises to 54.3 from 53.8; S&P500 will attempt to close above its 10-day MA of 1126 (not broken since May). AUSSIE & LOONIE SOAR against all currencies as wheat extends its 55% rally of the past 4 weeks amid worsening...

AUSSIE & LOONIE SOAR against all currencies as wheat extends its 55% rally of the past 4 weeks amid worsening draught in Russia. Aussies leadership is also boosted by the prolonged strength in energy and metals as the Federal Reserve opens the door for the possibility of renewed asset purchases...

Tonight's Aussie Q2 CPI (1:30 GMT) will be key in providing clues on the next RBA decision but the tricky part comes in the mixed showing of q/q and y/y data. Mondays Q2 PPI showed softer than expected q/q PPI at 0.3% but a higher 1.0% on y/y basis. See Monday's PPI in calendar here: ...

US 2-YEAR YIELDS remain at 0.58%, flirting with their all time lows as not only the Fed funds rate is seen unchanged for at least another 9 months but also due to the possibility of further easing. Aside from reiterating rates will remain low for an extended period, he could raise easing...

CAD DROPS ACROSS THE BOARD on combination of a dovish rate hike from the Bank of Canadas and broadening risk aversion. The BoC did raise rates to 0.75% as was expected but cut its 2010 GDP growth forecast to 3.5% from 3.7%, while indicating Canadian housing activity declining markedly. USDCAD...

UNEXPECTED TRADE SURPLUS in Australia making the Aussie the days strongest currency, as April trade surplus hit A$ 134 million due to 11% increase in exports (+25% rise in metals/iron ore exports). AUDUSD breaks out of 0.8420 trendline, eyeing 0.8520. AUDJPY stands to extend gains towards 78.80,...

ECB Intervention is inevitable, Gold set to catch down with other commodities & Aussie to way down under...

The 4% Monday rally in US equities resulted into a 4% Tuesday selloff in Shanghai and 1% selloff in the Nikkei, before European bourses sank in the red with 1.6% and 1.1% declines in the FTSE and the Dax. Despite better than expected UK manufacturing figures, UK markets remain jittery due to the...

MARKET VOLATILITY RETURNS as US equities drop 1.4%, FTSE-100 and Dax-30 drop 2.5%. JPY rallies across the board, while Aussie sustains broad damage, especially after the RBA reiterated overnight that interest rates were most appropriate. AUDUSD vulnerable to retesting 0.8750, AUDJPY eyes 78.80....

SHORTING THE AUSSIE AFTER 3 STRAIGHT down weeks . . . may be a risk for such a high yielding currency, but the latest 25-bp rate hike to 4.50%, was accompanied by a neutral policy statement in which...

GOLD HITS NEW RECORD vs. JPY at 112,670 yen, breaking the old December high as the yellow metal SHRUGS FALLING COMMODITIES due to ongoing sovereign uncertainty. The last time GOLD touched a new record in YEN TERMS was in 1st week of December when it was followed by pullback later that week on...

RBA SET TO RAISE rates by 25-bps to 4.50% tonight (4:30 GMT), which could give a short-term boost to the Aussie, but once again, it is the tone of the statement that could help shape the Aussies direction. Last week's release of the 2.9% rise in Q1 CPI was the highest in 5 quarters. Nothing in...

CHINA RAISED RESERVE REQUIREMENT on May Day Weekend by 50-bps to 17%, making its third tightening of the year. The last tightening was announced on February 19, on the eve of the Lunar Year Holiday. Although most Asian markets are closed for May Day holiday, JPY did spike higher across the board...

TONIGHTs RBA DECISION is said to be a close call (we expectc +0.25) due to recent data weakness (retail sales declines, trade deficit widening) and a report by Hedge Fund consultancy Medley Advisors (Robert Medley was advisor to George Soros) arguing for the lagging nature of housing prices. Fed...

Dow and S&P500 consolidate over the last 7 sessions with stochastics increasingly bearish (triple top in RSI, negative crossover in MACD). Although Nikkei was the only rallying index in Asian to have rallied on Wednesday, Thursday could be an occasion for a selloff, which could be extended by...

More yen weakness emerges as the Bank of Japan doubles its 3-month lending facility to Yen 20 trillion. Although the amount was within market expectations, the MoF has made its intentions clear to battle deflation and fight excessive yen strength. USDJPY is still seen breaking 91 and onto 92 w/in...