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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...

BACK TO SCHOOL & RISK AVERSION as Asian stocks dip back into the red; Jullia Gillard keeps power for Australias Labour Party thanks to the backing of 2 independents. Though her tax on resource makers is a watered down version of her predecessors 40%, both Aussie equities and the currency are...

MORE USDCAD DOWNSIDE (SEE CHART http://chart.ly/d3xo7bs ) as the loonie cheers the rise in risk appetite, especially when it is propped by improved US dynamics such as the US jobs report. CAD also gaining ahead of Wednesdays BoC interest rate decision, which is expected to produce 25-bp rate hike...

MARKETS CHEER AUG US JOBS REPORT as payrolls fall by smaller than expected 54K and the unemp rate rises to 9.6%. More striking is the July figure was revised down to -54K from -131K, while the private payrolls rose by 67K vs exp 41K following 107K in July, which was revised from 71K. JPY is the...

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...

AS GOLD HITS 8-WEEK HIGHS vs. all major currencies (except the yen) despite the euros broadening gains, the case for the yellow metal remains bolstered by what seems to be the inevitable path for QE2 from the Federal Reserve and the Bank of England. I made the case for $1270 in previous analysis...

After managing to sustain its highest levels for a year for a couple of weeks now the pound has slid back today against a basket of currencies on the back of risk aversion and capital flows into the US dollar, yen and Swiss franc as fears about the US and global economy continue to weigh on...

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...

EURCHF HITS FRESH RECORD LOWS at 1.2936 less than a day after SNB president said the cenbank is ready to intervene again. There are a few obstacles to any durable bounce in EURCHF; i) the Swiss franc is strong to the extent of dragging the rising USD down to 8-month lows at 1.0230. Chartists must...

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...

DON'T CONFUSE INTERVENTION WITH QE in the case of Japan. Japan's Fin Min Noda made it clear last week that any yen intervention would make little difference and that chances of US stepping in were "zero". So Japan is now moving in the way of further QE as was seen in December when the BoJ's fresh...

BERNANKE SPOKE, MARKETS WHIPSAWED before both USD and JPY accelerated their selloff in the last half hour of London trade. Readers of the IMT were alerted of these declines before the start of the US trading session, but once Bernanke spoke, I warned my followers on twitter (twitter.com/alaidi) on...

US Q2 GDP REVISED down to 1.6% (vs. exp 1.4%) from advanced 2.4% reading, triggering a relief rally in equities and BROAD YEN SELLOFF, especially since the Japanese currency has been already hit by: i) fresh political fallout in Japan and ; ii) escalating signals of a looming stimulus package...

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...

JOBLESS CLAIMS GOOD ENOUGH FOR FURTEHR USD WEAKNESS, +473K, which is good enough for risk appetite to improve, but since the overall continue to show clear uptrend, USD to remain on the backfoot. YEN WEAKNESS suggests 80.60s in CADJPY, NZDJPY eyes 60.20. GBPUSD rebound accumulated fresh bids in...

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...

JAPAN & GERMANY in the spot light, with the Japanese making more ineffective talk regarding the yen and German Aug IFO due at 8 am GMT. More on IFO below. Talk that the the BoJ may hold an extraordinary meeting to consider additional monetary easing is not helping to weaken the yen, while Japan...

#082410.gif_640W.gif# The EUR/USD has rebounded off the key 50% retracement level at 1.26 to highlight the possible completion of a 5-wave down-move off the August high. While 4-hourly bullish diverging studies hint of a period of base building, reclaiming the key 1.2732 swing low is required...

The JPY Trade-Weighted Index shatters its 2009 high of 135 (as measured by the Deutsche Bank Index), hitting a high of 139.14. Here is the chart I posted 2 weeks ago http://bit.ly/aivsPK warning of a breakout against what many have called a doubletop. ......

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...

Ashraf on CNBC-Squawk (US) discussing yen strength, its reasons and why currency intervention remains unlikely. http://bit.ly/cqUi7b ......

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...

ECBs WEBER ROCKS THE EURO with some hawkish comments after saying ECB discussions revolving around removing monetary stimulus around Q1 2011. Irish 10yr yield spreads over Germany back up to 390 bps. While the 1.2730-40 support has been broken intraday, a weekly break would signify 1.2550s. CAD...

CANADA JUL CPI is the only data item of the day, further inflation softening could add to CAD selling especially in the event of prolonged declines in appetite. Watch the annual core CPI (exp at 1.8% from 1.7%). USDCAD 3-hr shows immediate TL resistance at 1.0420, a break of which seen extending...

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...

YENs TRADE-WEIGHTED INDEX http://chart.ly/4dt85t the chart in the link is Deutsche Banks JPY Traded-Weighted Index, showing the currency testing the highs of January 2009. Despite the similarity of the price pattern with Jan 2009, there are differences. GLOBAL BOND YIELDS TODAY are dragged by a...

STERLING RALLIED immediately after the BoE minutes showed Andrew Sentence continued to call for a 25-bp rate hike. While this was no real surprise, some players thought that perhaps Sentence would not dissent considering the emerging slowdown in inflation across the G7. Considering yesterdays...

WATCH BoE MINUTES: Wednesdays release of the minutes from the August MPC meeting could add to GBP losses. The currency has been hit hard after Tuesdays unexpectedly weak July CPI (see earlier IMT for detail). The inflation story is a big deal. For the past 4 months, strong UK inflation was the...