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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...

GDPs, BERNANKE & CONSUMER SENTIMENT: UK Q2 GDP (4:30 EST, 8:30 am GMT, 9:30 BST) is expected to remain unrevised at 1.1% (the highest rise in 4 years), but any downward revision will likely ease cable into the $1.5570s.========= US Q2 GDP (8:30 EST, 12:30 GMT) seen revised to 1.3% from the advance...

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...

Did you close out any long positions today? Well if not then you are one of a few! Today (Wednesday) the market gapped down 1.5% at the opening bell which set a very negative tone for the session. Volume was screaming as protective stops triggered and traders close out positions before prices...

GBP & JPY are at opposite ends as sterling is the biggest loser in todays FX market flows following an unexpected decline in UK July RICS (House Price balance) to -8 from +9, the 1st negative index since July (and lowest since April 2009). JPY gains on slower than expected Chinese exports growth...

3-WAY FOMC SPLIT? How about a 3-way split at the FOMC tomorrow? Kansas Fed's Hoenig keeps his (hawkish) dissent against the "exceptionally low rates" lingo, St. Louis Fed's Bullard votes (dovish) for implementing bond buys on the spot-in line with his recent statements, and rest of the FOMC votes...

Ashraf's Video Market Analysis previewing Tuesday's FOMC decision (What to look for & what it means), Hoenig's dissent, FX impact and oil resistance: http://bit.ly/bNickr FOR MORE FREQUENT market updates & analysis, follow me on Twitter: http://twitter.com/alaidi ......

CADJPY & USDCAD. CADJPY's LOWER HIGHS pattern continues since April. Each of the last 3 cycle peaks (mid May, mid June and mid July) failed to take out prior peaks. This suggests that a break of 83.80 is unlikely to be followed by subsequent gains beyond 85.00. This is a pair with relatively...

The rebound in the Reuters CRB since the lows in early June has seen equity markets reverse most of their losses from the sell-off in May. Commodity prices have risen across the board from soft commodities like, Cocoa, Sugar and Wheat on supply concerns to industrial metals like copper on...

The US JULY JOBS report (-131K NFP, private payrolls +71K from +31K, unemp rate unchanged at 9.5%) is sufficiently negative for the market to sell the USD across the board based on the rationale of additional easing measures from the Fed. I noted yesterday "negative US jobs report may not boost...

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...

Pay attention to the EU-USD Spread of Libor rather than isolating EUR & USD libor. ...

USD STRESSED OUT BY BERNANKE? Since markets are widely expecting Bernankes testimony to highlight the Feds downgrade for US growth and inflation, most FX players see it as an opportunity to sell USD into the end of the US session. Yet, it is relatively common for markets to bid up currencies 2-3...

MOODYs JOINS THE PARTY LATE AGAIN as it downgrades Ireland's bond rating to Aa2 from Aa, the same equivalent bond rating issued by S&P in December. Note that Fitch downgraded Ireland to AA- 13 months ago. Euro shrugs the news and rallies the recovery in late Asian session. Just as we saw EURUSD...

Yen strength is here to stay especially as the US dollar's safe-haven lustre is eroded by the worsening US data. ...

FOMC MINUTES INDICATE A FED DOWNGRADE of the the US econ outlook for 2010 and 2011, weighing on yields and stocks, while keeping USD mixed. FOMC revised down its 2010 and 2011 projections for GDP growth and inflation while pushing up its unemployment outlook from the April forecasts; GDP down to...

OIL UNABLE TO BREACH ITS 200-day MA of 77.40,which coincides with the trend line resistance extending from the Mar 5 high thru the June 28 high. This also helps explain USDCADs support at the 1.0270 floor and subsequent recovery to 1.0370. Sticking with prior IMTs bearish call on EURGBP eyeing...

US JUNE RETAIL SALES -0.5% (vs exp -0.2% and prev -1.1%), ex autos -0.1% from prev -1.2%. Better but not good enough is one way to sum up these figures. Youd have to remove autos, gas and building material to obtain a positive retail sales figure. The 1.3% DECLINE IN JUNE IMPORT PRICES was the...

UK UNEMPLOYMENT fell by 20.8K in June after a 31K decline in May with the unemployment rate dropping to 4.5%--lowest since March 2009. The robust figures may not dispel doubts over the impact of upcoming decline in falling public sector jobs. The weaker than expected 2.7% increase in average...

WHEN IN DOUBT REMAIN DOVISH. Yesterday's FOMC decision may have been uneventful but the statement did sound more dovish on two fronts: 1) downgrading "financial conditions" and 2)highlighting "depressed" housing starts. The record tumble in US April new home sales to 47 year lows was nearly double...

PBOC OVERSHADOWS FOMC as hardly a word is said about this week's FOMC announcement. Although China's central bank used the rationale of improved domestic and global economy for its decision to allow more flexible currency regime ie further strengthening, the US central bank is widely expected to...

USD INDEX hits a low of 85.45, as the risk rally extends US equity indices well above their 200-day MAs. A monthly close below 86.50 will prevent the index from posting a record 7 monthly increases. While we did see a EURUSD close above $1.2370, we've yet to see a weekly close above that level....

YEN DROPS THE MOST as FOMC STATEMENT a marginal upgrade of its economic outlook, while maintaining the extended period phrase regarding exceptionally low levels of the federal funds rate, to which Kansas Feds Hoenig remains the sole dissenter. USDJPY maintains uptrend in weekly channel, set to...

TODAY's FOMC DECISION (18:15 GMT) may continue the DOVISH LANGUAGE of keeping "extended period" in the statement, but WATCH OUT out From the possibility that one more FOMC member (in addition to Kansas Feds Hoenig) will dissent with the FOMCs dovish stance. St Louis Feds Bullard has recently...

Ashrafs Video Presentation on EURGBP daily and weekly outlook http://bit.ly/aLZPJT GBPUSD broadens losses overnight to test the $1.5160 low50% retracement of the rally from March low to the April high. Todays FOMC decision (18:15 GMT) and Thursdays political debate among the 3 major British...

GOLD STAND OUT FROM COMMODITY DAMAGE as the yellow metal soars over $25 to hit new 2010 high at 1172. But the fact that silver, copper and oil each fell sharply today, underlines the knee-jerk reaction of safe-haven buying after the Greece-Portugal downgrades and the questioning of Goldman Sachs....

CANADA CPI & RETAIL SALES Both weaker than expected. CAN CPI Softer than expected, slowing to 1.4% y/y in March from 1.6%, with the BoCs annual core CPI down to 1.7% from 2.1% vs exp 1.9%. Canada Mar retail +0.5% from +0.7% vs. expected 1.1%, while core sales from -0.1%. USDCAD eyes 1.0070, but...

LATEST FED SPEAK Although the accommodative stance language can be expected to stay in the upcoming FOMC statements, traders are increasingly aware that such language is used as an offset for upcoming hawkish developments such as: i) the termination of the MBS purchases next week; (ii) start of...

DEALER TALK OF a Fed DISCOUNT RATE HIKE TALK is pushing up USD, dragging down EURUSD to $1.3590. RATIONALE: Discount rate now at 0.75%, which is 50 bps above Fed funds and well below the 100-bps spread prevailing before the beginning of the easing cycle (Aug 2007 discount rate cut). Such...