Ironfx Market Update

[exllon]

22 Aug 2011

COMMENTARY

Merkel says she’ll resist pressure for Euro bonds

German Chancellor Angela Merkel attempted to shut the door on common euro-area bonds as a means to solve the debt crisis, saying that she won’t let financial markets dictate policy. Joint euro bonds would require European Union treaty changes that would “take years” and might run afoul of Germany’s constitution, Merkel said. While common borrowing might arrive at some point in the “distant future,” bringing in euro bonds at this time would further undermine economic stability and so they “are not the answer right now.” “At this time -- we’re in a dramatic crisis -- euro bonds are precisely the wrong answer,” Merkel said. Investor calls for euro bonds intensified last week as concerns about the debt crisis and a stuttering global economy drove European stocks to their lowest in more than two years. “Politicians can’t and won’t simply run after the markets,” Merkel said.

HEADLINE NEWS

• Treasuries price in QE3 as Barclays says traders anticipate $500 billion
• Yen, Franc weaken amid speculation Japan, Switzerland ready to intervene
• Asian stocks pare retreat as Fed stimulus speculation tempers Euro impasse
• Gold rallies sixth day to all-time high
• Emerging-market bonds show ratings don’t matter as debt rallies like Bunds
• Oil drops for third day as Qaddafi regime teeters as rebels enter Tripoli

BENCHMARK CURRENCY RATES - GAINERS & LOSERS

 

[exllon]

EUR/USD (1-hour)

Support Resistance
1.4350 1.4415
1.4295 1.4460
1.4255 1.4520

XAU/USD (1-hour)

Support Resistance
1,844.00 1,878.00
1,820.00 N/A
1,814.00 N/A

 

[exllon]

COMMENTARY
24 Aug 2011
Japan unveils $100B effort to cope with Yen

Japan’s government unveiled a $100 billion effort to help companies cope with persistent strength in the yen that threatens to thwart the nation’s recovery from three straight quarters of economic contraction. Officials will release foreign-currency reserves to the Japan Bank for International Cooperation to aid exporters and spur purchases overseas, Finance Minister Yoshihiko Noda told reporters today in Tokyo. JBIC, as the lender is known, is a state-run export credit agency. Today’s announcement is “somewhat underwhelming and unlikely to have much impact” on the exchange rate, said Mitul Kotecha. The move seems “unlikely” to increase the limited appetite that Japanese firms have for overseas purchases, the analyst said. The ministry will bolster monitoring of the currency market, requiring major financial institutions to disclose trading positions, Noda said.


HEADLINE NEWS

• Central banks to retain gold to manage debt in crisis, Morgan Stanley says
• Japan debt rating cut to Aa3 by Moody’s
• Yuan approaches 17-year high on speculation central bank to tolerate gains
• U.S. stock futures retreat after S&P 500 index’s biggest advance in a week
• Merkel rejects seeking collateral in European bailouts as splits emerge
• Oil climbs for third day as report shows decline in U.S. crude stockpiles

 

[exllon]

25 Aug 2011

COMMENTARY

Dollar holds gains amid speculation before Bernanke speech, German data

The dollar gained against the majority of its most-traded peers amid speculation on what steps Federal Reserve Chairman Ben S. Bernanke will outline today to stimulate the U.S. economy. The greenback advanced as investors bet on whether Bernanke will signal a willingness to consider a third round of bond purchases, or QE3, when he delivers a speech at Jackson Hole, Wyoming as reports showed U.S. growth maintaining momentum. I’d have a bias toward more U.S. dollar buying as I just don’t see Bernanke as coming out and delivering anything too dramatic on the QE3 front,” said Mike Burrowes. “There’s a bit of a battle going on between risk sentiment and a reassessment of QE3.” Bernanke told Congress in July the Fed’s options to bolster the economy include increasing the average maturity of its bond portfolio and cutting the interest rate on excess reserves, as well as buying more debt and keeping rates low.

HEADLINE NEWS

• 
  [*]Nasdaq-100 futures retreat after Jobs resigns
  [*] Orders for durable goods in U.S. increase 4%, twice as much as estimated
  [*] Home prices in U.S. declined 5.9% last quarter on year, rose 0.9% in June
  [*] China’s stocks rise on earnings growth, U.S. economic data
  [*] ECB can ease dollar-market tensions if necessary, Bundesbank official says
  [*] Gold may rebound from biggest drop in 18 months on demand for haven assets
  

BENCHMARK CURRENCY RATES - GAINERS & LOSERS

 

[exllon]

XAU/USD (4-hour)

Support Resistance
1,731.00 1,814.00
1,705.00 1,863.00
1,641.00 1,912.00

 

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MARKET UPDATE ~05 Sep 2011

05 Sep 2011

COMMENTARY

Treasuries Surge on Jobs-Growth Stall, Outlook for More Stimulus From Fed

Treasury 30-year bond yields fell to the lowest since January 2009 after a government report showed no jobs were added in August, reinforcing concern the U.S. economy has slowed, which may prompt additional stimulus by the Federal Reserve. U.S. 10-year yields fell below 2 percent as U.S. employment data yesterday gave the weakest reading since September 2010. Minutes of the Fed’s Aug. 9 meeting released Aug. 30 showed policy makers suggested the central bank could offer more support for the economy through focusing on purchases of longer- term securities. Ten-year notes gained for the fifth time in six weeks before the Fed releases its summary of regional economic conditions on Sept. 7. Fed officials discussed a range of tools, including buying more government bonds to bolster the economy without coming to an agreement on what they might do next should the economy weaken further. They will more fully debate their options when they gather Sept. 20-21 for a two-day meeting that was originally scheduled to last one day.

HEADLINE NEWS

• Dollar rises against Euro, Kiwi, Aussie in early trades on risk aversion
• SNB may have to buy Euros to stem Franc heading for record weekly advance
• Mayors call for job creation through U.S. spending coupled with Tax change
• IMF said to oppose push for Greek collateral
• ECB needs to reverse rate increases to prevent recession, Economists say
• Gold may fall as investors seek cash as equities slump on growth concerns

BENCHMARK CURRENCY RATES - GAINERS & LOSERS

 

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MARKET UPDATE ~06 Sep 2011

COMMENTARY

RBA leaves cash rate unchanged at 4.75%

As a measure of the interest rate for overnight money market deposits, as widely expected, the Reserve Bank of Australia left the cash rate unchanged in September at 4.75% for an eighth consecutive month. This decision was in line with market expectations.In a short statement released at lunchtime today, the RBA said it was "prudent to maintain its current policy stance" in the current economic climate."Global financial markets are still very unsettled," the statement said.Adding that financial conditions are "tighter than normal", the bank has moved to curb inflation as many Australian industries outside the resources sector continue to struggle.
Year-ended CPI inflation should start to decline towards the end of the year, as temporary weather-related effects reverse. But measures of underlying inflation have been increasing this year, after declining for the previous two years,” said RBA Governor, Glenn Stevens, in the RBA Rate Statement.

HEADLINE NEWS

• 
  [*]Asia stocks, Euro drop as treasury 10Y yield Falls
  [*] Berlusconi seeking support for budget as union protests austerity package
  [*] Yields converging most in two years as JGBs no longer lowest: Japan credit
  [*] Australian home-loan approvals rise less than expected as rates on hold
  [*] Gold rises as growth, debt concerns boost Demand
  [*] Brent Oil Climbs 0.9% in London; New York Crude Pares Loss after Holiday
  

BENCHMARK CURRENCY RATES - GAINERS & LOSERS