Dagelijkse Markt Analyse 11 Januari 2019

DAGELIJKSE MARKT ANALYSE 7 MAART 2013

• Dollar is as Strong as EUR/USD, USD/JPY Says it Is
• Euro: Laying out the Scenarios for EUR/USD, EURJPY on ECB
• British Pound: GBP/USD His New Multi-Year Low Before BoE
• Japanese Yen Slow Depreciation Will Continue Unless This Happens…
• Canadian Dollar as Bank of Canada Moves Further Away from Rate Hike
• Gold: Our Gauge of the Market’s Effort to Escape Currencies


Dollar is as Strong as EUR/USD, USD/JPY Says it Is
A growing voice of support is being made for the dollar as an investment currency on the rise. While this may be the case months down the line; for now, the dollar’s strength is a product of the euro and yen’s weakness. The short-fall for the greenback is its exceptionally low benchmark yield that will be held at basement levels by the Fed until unemployment is seen back at 6.5 percent and / or inflation crests 2.5 percent. Furthermore, market-based rates – based on low-risk Treasury and Libor – are also at lows and can drop further with the central bank’s aggressive stimulus program. This would be the issue that would hold the dollar back if there were indeed a strong drive behind risk and carry trade appetite. On that point, global yields / rates are just off record lows and investor participation (measured in volume and open interest) shows little interest in chasing such thin returns when stimulus-targeted assets are the only position showing capital gains.

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DAGELIJKSE MARKT ANALYSE 8 MAART 2013

• Dollar Outlook Tarnished by ECB, NFPs Offers a Risk Reprieve
• Euro Rallies Sharply after ECB Scoffs at Stimulus Expectations
• British Pound Shows Mixed Reaction to Mum BoE, Don’t Look Away
• Japanese Yen: Now on to an Era of Unprecedented BoJ Stimulus
• Canadian Dollar Ready for Volatility on Employment Data
• Swiss Franc: SNB May not be Buying More Euros, but It Isn’t Selling
• Gold: Market Has Grown Extremely Quiet, Breakout Risk High


Dollar Outlook Tarnished by ECB, NFPs Offers a Risk Reprieve
The Dow Jones FXCM Dollar Index retreated from its two-and-a-half year high, but the slip failed once again to turn the persistent bull trend of the past months. However, the fundamental backdrop speaks to a deterioration in the greenback’s potential forward momentum; while the label of ‘over-extended’ is looking more and more appropriate for the benchmark’s lofty heights. Doubt arises via multiple angles for the dollar – most notably through stimulus. Amongst the world’s largest central banks, the Federal Reserve is by far the most liberal group when it comes to supporting its system. The $85 billion-per-month stimulus regime the Fed has maintained since the beginning of the year (upgraded from the $45 billion-per-month mortgage backed securities and $40 billion Treasuries recycling) is expected to remain in place through the end of the year. Setting that effort in an even deeper relief, we learned this past session that the ECB would allow its own balance sheet to shrink and the BoE was holding its small holdings steady (more on that below).

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DAGELIJKSE MARKT ANALYSE 12 MAART 2013

• Dollar Eases Off Multi-Year High as S&P 500 Marches Higher
• Euro Steady After Italy Downgrade, Talk of German Voter Discontent
• Japanese Yen Decline Restrained Despite Intensified Stimulus Expectations
• British Pound to Find Guidance in Data, Real Interest in BoE’s Plans
• Australian Dollar Rallies as Yields Hit 10-Month High, Rate Outlook Improves
• New Zealand Dollar Outpaces All Counterparts, Bond Auction Shows Demand
• Gold’s Tight Congestion Awaits Either a Dollar Drop or Stimulus’ Spark

Dollar Eases Off Multi-Year High as S&P 500 Marches Higher
The dollar opened with some pep Monday – enough to post a fresh, intraday two-and-a-half year high – but the threshold for bullish momentum is significantly more difficult to achieve. For the Dow Jones FXCM Dollar Index, the 520 pip or 5.2 percent advance since the beginning of the year has contradicted a very prominent fundamental theme – a rise in risk appetite trends. The sustenance of this unusual correlation has been made possible by a questionable level of conviction behind the sentiment push as well as well-timed troubles for the benchmark’s most liquid counterparts. That fortunate combination of factors can only last for so long however. The glow from the four-year low unemployment rate – specifically its marginal implication for an early withdrawal of stimulus in the second half of the year – from this past Friday has no doubt worn off. So, we move on the next round of event risk. On the docket, the House Budget Committee’s2014 budget proposal is due in the upcoming session; but its supposed 10 year return to a balanced budget seems ambitious. Meanwhile always keep an eye on risk trends.

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DAGELIJKSE MARKT ANALYSE 13 MAART 2013

• Dollar Eases a Second Day as Dow Matches Strongest Rally in Years
• Euro: Signs of Liquidity Trouble, Watch Key Bond Auctions and EU Topics
• New Zealand Dollar: Is RBNZ Policy Speculation Going to Follow BoE Footsteps?
• British Pound Extends Decline as Data Feeds Fear of Triple Dip Recession, Stimulus
• Japanese Yen Advances for the First Time in 4 Days, Policy Officials Have Spoken
• Australian Dollar Heading into Volatility with Thursday Jobs Data
• Gold Posts Biggest Rally in Two Weeks on Fading Volume, Volatility


Dollar Eases a Second Day as Dow Matches Strongest Rally in Years
The Dow Jones FXCM Dollar Index hasn’t fallen for three consecutive days since December 12. Yet, greenback weakness in the early hours of Wednesday’s trading session suggests we may match that performance mark this week. The benchmark currency’s performance has long run askew of its negative correlation to risk trends thanks to questionable convictions behind yield appetite and exceptional weakness of key counterparts (yen, pound and the Euro). The ‘end of stimulus is nigh’ conversation that was stoked by this past Friday’s drop in the jobless rate has run thin. Looking ahead, the February retail sales report is unlikely to carry its weight in the larger themes that concern dollar traders. Meanwhile, the Dow equity index has rallied 8 straight days – matching the most aggressive run in 16 years.

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DAGELIJKSE MARKT ANALYSE 14 MAART 2013

• Dollar Holds 10,500 and its Bull Trend as Dow Breaks 16-Year Record
• Euro Tumbles on Italian Risk Flare Up, EU Members Meet Thursday
• New Zealand Dollar Tumbles after RBNZ Hints at Rate Cuts
• Australia Dollar Soars after Strong Employment Data Report
• Swiss Franc: Should We Expect Volatility on the SNB?
• British Pound: BoE Quarterly Bulletin Notes Pound Drop
• Gold Rebound Cut Short As Dollar Stabilizes, Volume Never Materializes


Dollar Holds 10,500 and its Bull Trend as Dow Breaks 16-Year Record
It seems the Dow Jones FXCM Dollar will extend its record for avoiding a three-day consecutive decline beyond the three-month mark. The greenback advanced against most of the majors this past session – despite the persistence of stimulus-supported risk trends in the equity market – and has upheld its impressive aggregate bull trend. However, this advance looks more and more dubious with each day against the backdrop of strong performance in other ‘risky’ asset classes. If investor appetite for yield continues to build, the greenback will eventually fold to its safe haven status (which is still prominent in pairings lik EUR/USD, NZDUSD, AUDUSD). That said, a market-wide risk aversion move could forestall judgment. With the Dow stock index postings its longest rally in 16 yearson fadingvolume, the risk is palpable.

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DAGELIJKSE MARKT ANALYSE 15 MAART 2013

• Dollar Suffers Biggest Drop in Two Months, Is this a Reversal?
• Euro Officials Tread Bullish Line as Effort Shifting Towards Growth
• British Pound: BoE Governor Mervyn King Says Pound at Fair Value
• New Zealand Dollar Restrained Despite RBNZ 10-15% Overvalued Comment
• Australian Dollar: RBA Rate Outlook Most Optimistic in 19 Months After Data
• Japanese Yen Moves Beyond a Serious Barrier to Further Declines
• Gold Recovers from Sharp Drop as Volume Recovers


Dollar Suffers Biggest Drop in Two Months, Is this a Reversal?
The dollar dove this past session – leading FX traders to wonder whether this was just a sharp response to big moves from EURUSD, GBPUSD and AUDUSD or the establishment of a bigger trend. That assessment should be made on the merits of the fundamental drive be behind this tentative swell in volatility as well as the themes that are likely to control the herd moving forward. First, an assessment of performance. The Dow Jones FXCM Dollar drop measured 0.5 percent for the biggest decline since January 10. The pace of the decline isn’t as important to the story as where this decline has occurred. With Thursday’s stumble, the USDollar Index has dropped back below 10,500 and in doing so has finally broken from a consistent rising trend channel that has focused bulls since late January. And, for the technically inclined, this has all happened after the currency failed to overtake the midpoint of the past decade’s range.

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DAGELIJKSE MARKT ANALYSE 19 MAART 2013

• Dollar Drops Alongside S&P 500 on European Troubles
• Euro Troubles Just Starting as Cyprus Issues Drag Out
• Japanese Yen: What to Expect in BoJ Power Transition
• British Pound: CPI Reading a Precursor to Policy Fireworks Wednesday
• Australian Dollar Little Influenced by RBA Rehash
• Swiss Franc: SNB Given the Green Light to Halt Eurozone Capital Inflows
• Gold Climbs on Cyprus, Ready for BoJ and Fed


Dollar Drops Alongside S&P 500 on European Troubles
You would think that the occasion of a market-wide financial shock that emanated from the dollar’s primary counterpart (the euro) would be a sure thing for the dollar to rally on. And yet, the greenback fell against most of its counterparts through this week’s opening session. Looking for an alternative to the euro is just one fundamental consideration. The bigger disconnect through ‘normal’ FX reasoning is the greenback’s deviation from basic risk trends. The S&P 500 dropped as much as 1.0 percent and closed 0.6 percent down after an intraday bounce temporarily erased most of the session’s losses. Risk trends are going to be a key component to the greenback’s performance over the next 24 hours – yet the dollar’s roll as a safe haven may not play through unless risk aversion hits a stride. Otherwise, we await the Fed Wednesday…

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DAGELIJKSE MARKT ANALYSE 20 MAART 2013

• Dollar and S&P 500 Ready for Fed Rate Decision
• British Pound Awaits UK Budget, BoE Go Ahead for Stimulus
• Euro Tests Four Month Lows as Cyprus Plan Rejected
• Japanese Yen: What will Kuroda Do in His First Day at the BoJ Reins
• New Zealand Dollar Weighs RBNZ Warnings against 4Q GDP
• GoldClimbs a Fourth Day, Focus Shifts from Euro Risk to Stimulus


Dollar and S&P 500 Ready for Fed Rate Decision
The dollar finally regained its composure this past session as fear of a systemic risk spread starts to creep back into the picture. With the Eurozone / Cyprus troubles deepening and the Federal Open Market Committee (FOMC) decision due ahead, we have the kind of heavy event risk that can revive true fear and in turn resync fundamental correlations rooted in investor sentiment. On the other hand, having so many big-ticket fundamental trends on tap creates a larger possibility of ‘crosswinds’. For example, if the euro regains ground and stalls the dollar through its most liquid pairing – EURUSD – it can temper the influence of a ‘favorable’ Fed stimulus outcome. We have to traverse this minefield carefullyand keep a close eye on how the different fundamental themes interact.


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DAGELIJKSE MARKT ANALYSE 21 MAART 2013

• Dollar: Not Enough Fed QE Tapering Evidence to Spark Risk Aversion
• Japanese Yen: BoJ Governor Planning His First Official Statement Today
• Euro Once Again Center of FX Traders’ Focus with Second Cyprus Vote
• British Pound Torn Between UK Budget Implications, Scope for BoE to Do Far More
• New Zealand Dollar Rallies Sharply after Strong GDP Report
• Canadian Dollar Traders Prepared for Finance Minister’s Budget
• Gold Eases as Cyprus Crisis Momentum Cools, Fed Keeps Hint of QE End


Dollar: Not Enough Fed QE Tapering Evidence to Spark Risk Aversion
The dollar found some support in this past session’s fundamental fireworks – but far less than what could have been realized had the Federal Reserve taken more defined steps on monetary policy. Yet, now is not the time to take our eyes off the market. The S&P 500 is just off record highs while the Dow Jones FXCM Dollar Index is slightly off its own two-and-a-half-year highs. The peculiar correlation between these benchmarks – on polar opposites of the risk spectrum – can come to an explosive end given the backdrop for fundamentals we retain. We must keep our focus on two fundamental elements: underlying risk trends and relative stimulus efforts.


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DAGELIJKSE MARKT ANALYSE 22 MAART 2013

• Dollar: Would a Dow Jones Industrial Average Lift the USD?
• Euro Drops Against All Counterparts Amid Cyprus Wrangling
• Japanese Yen Firms Up after BoJ Kuroda’s First Speech, What Did He Say?
• British Pound: Where is the Evidence of Markets Projecting Rate Cuts?
• Canadian Dollar Fiscal Plan Sees Spending at 23 Year Low, Hope For Recovery
• New Zealand Dollar Post-GDP Rally the Strongest in Six Months but No Trend
• Gold Glued to $1,615, Threatens Bullish Break with Plenty of Backing


Dollar: Would a Dow Jones Industrial Average Lift the USD?
Risk trends are looking heavy. The S&P 500 suffered its biggest daily drop in a month (0.8 percent) Thursday, which would usually lead us to expect to see a significant posturing from the US dollar for a break higher. Instead, the Dow Jones FXCM Dollar Index was red for the first time this week. Furthermore, where the equity indexes look prone to reversal, so too does the dollar after a hearty run higher. On a positioning basis, the greenback has enjoyed a hearty performance against its most liquid currencies; so it doesn’t have an easy over-sold rebound available to it. Brute force is needed to extend its drive – either through severe risk aversion or stimulus from the BoJ or ECB.


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DAGELIJKSE MARKT ANALYSE 26 MAART 2013


• Euro: Cyprus to Face Deeper Recession, Capital Control for Weeks
• British Pound: U.K. Banks to Boost Capital, Retail Sales Slumps
• U.S. Dollar: Durable Goods, New Home Sales, Consumer Confidence on Tap

Euro: Cyprus to Face Deeper Recession, Capital Control for Weeks
The Euro is struggling to hold above the 200-Day SMA (1.2874) even as European policy makers talk down the heightening risks surrounding Cyprus bailout, and the single currency may weaken further over the near to medium-term as the fundamental outlook for the region turns increasingly bleak.

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DAGELIJKSE MARKT ANALYSE 27 MAART 2013

• Dollar Unable to Capitalize on Euro, Yen Weakness
• Euro: Why Doesn’t the Risk of Region-wide Bank Levies Spur Selling?
• Japanese Yen Now Dependent on Risk Moves Before April 4
• Australian Dollar: RBA Relents to Strong Currency
• British Pound Traders Should Look Closer at Osborne’s Comments
• Canadian Dollar Volatility Threshold High for February CPI Data
• Gold Drops a Third Day Despite Eurozone Financial Risks


Dollar Unable to Capitalize on Euro, Yen Weakness
The euro was crushed under headlines suggesting systemic risks are returning to the region and risk trends were pushing the yen crosses higher, yet the US dollar found itself unable to capitalize on its counterparts’ weakness. The Dow Jones FXCM Dollar Index (ticker = USDollar) ended Tuesday virtually unchanged at 10,450 – but perhaps that is a win for the safe haven considering the Dow Jones Industrial Average reflected a record high close for US equities. Weight was giving to the data offered on the day, but durable goods were just as weak as new home sales and consumer confidence figures when you look at the details. For the dollar to truly take off, we need one of three motivating catalysts: a committed risk trend move; the Fed to imply a QE3 end date; or other central banks to pick up the pace.

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DAGELIJKSE MARKT ANALYSE 28 MAART 2013


• Swedish Krona May Rise if German Jobs Report Tops Expectations
• Euro Looks to Reopening of Cyprus Banks for Directional Guidance
• Yen Rose as Aussie Dollar Underperformed on Risk Aversion in Asia

German Unemployment figures headline the economic calendar in European hours. Expectations call for the economy to add 2,000 jobs in March, keeping the unemployment rate unchanged at 6.9 percent for a sixth consecutive month. The March set of German PMI figures showed resilience in hiring despite weakness in overall private-sector activity. Indeed, Markit reported the strongest improvement in employment since January 2012, saying companies it polled cited “efforts to increase capacity and long-turn expansion plans.” Currencies geared to German growth – notably the Swedish Krona – may find support if that proves to foreshadow a better-than-expected outcome on today’s report.

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DAGELIJKSE MARKT ANALYSE 29 MAART 2013


• Dollar Looks to Close Sixth Bullish Quarter, What are the Drivers Ahead?
• Euro Traders Looking at Slovenia, Italy as Next Systemic Crisis Risk
• British Pound Still Weak Despite Questionable Stimulus Outlook Next Week
• Japanese Yen: Government Sets Wheels in Motion to Ensure BoJ Stimulus
• Australian Dollar Approaching RBA Decision with Increased Optimism
• Canadian Dollar Unable to Capitalize on GDP – A Lesson in What Matters
• Gold Ends Quarter Building Congestion on Low Volume, ETF Divesting

Dollar Looks to Close Sixth Bullish Quarter, What are the Drivers Ahead?
While the quarter is over for the US capital markets with exchanges closed for the Good Friday holiday, the Dow Jones FXCM Dollar Index still has one more day to break from its fundamentally-tense meander between 10,500 and 10,400 and revive a new trend before Q2. This is unlikely to happen, however, considering a good portion of the speculative world will be offline until next week. Meanwhile, an observation of trader positioning – whether you believe in investor confidence or stimulus – the S&P 500 closed the day, week and quarter at a record high. Yet, the lowest volume level in 15 years – 32.96 billion shares – should keep risk bulls on their toes and dollar bulls ready.

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DAGELIJKSE MARKT ANALYSE 1 APRIL 2013

• Dollar, Yen Rise on Safe Haven Demand as Stocks Fall in Asian Trade
• US ISM Manufacturing Data May Outperform, Boosting Risk Appetite

The US Dollar and Japanese Yen outperformed in overnight trade – adding as much as 0.3 and 0.5 percent respectively against their major counterparts – as stocks fell in Asia and drove demand for the standby safe haven currencies. The MSCI Asia Pacific regional benchmark stock index fell as much as 1 percent on the back of disappointing Japanese and Chinese economic data.

Japan’s Tankan survey showed large manufacturers’ sentiment improved less than expected in the first quarter. Meanwhile, the forward-looking Outlook gauge unexpectedly printed in negative territory for a third consecutive period while capital spending fell 2 percent, sinking bets for a 5 percent increase. China’s Manufacturing PMI gauge printed at 50.9 in March, showing factory-sector activity accelerated less than economists expected. Consensus forecasts argued for a reading at 51.2 prior to the release.


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DAGELIJKSE MARKT ANALYSE 2 APRIL 2013

• Dollar Slides Alongside US Stocks as Long as VIX Remains Low
• Japanese Yen Makes a Bullish Move, Is it Tradable?
• Australian Dollar Traders: What to Expect of the RBA Rate Decision
• Euro Financial Trouble Cautious Ahead of Slovenia Update
• British Pound Firms as Rate Watchers Size Up Their Exposure
• US Oil Ends a Five-Day Rally Just Below 98
• Gold Builds Breakout Pressure with Volume Collapsing, Range Tightening


Dollar Slides Alongside US Stocks as Long as VIX Remains Low
The unusual, positive correlation between the safe haven US dollar and return-chasing US equity indexes persisted Monday. Though regaining some traction later in the session, the S&P 500 closed the day down 0.5 percent. At the same time, the Dow Jones FXCM Dollar Index eased off 0.3 percent and hovers precariously just above the 10,420-threshold. Both are at risk of shifting tides to a meaning bearish bias after impressive runs, but would fundamentals and market conditions support a hand-in-hand reversal it were to develop? Unlikely. Bouts of risk aversion measured in stock indexes these past weeks are merely range fodder rather than committed sentiment changes. That means, dedicated deleveraging and capital reallocation has never truly taken. Without the resolute drive to safety, we don’t have an equity bear wave, a committed surge in volatility measures (VIX) nor the negative correlation between shares and dollar.

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DAGELIJKSE MARKT ANALYSE 3 APRIL 2013


• Euro at Risk if Soft CPI Print Prompts Dovish ECB Expectations
• Disappointing US ISM Data May Weigh on Risk Appetite, Boost Yen
• Major Currencies Little Changed vs. US Dollar in Quiet Asian Trade

A preliminary estimate of the March Eurozone CPI print headlines the economic calendar in European hours. Expectations call for the year-on-year inflation rate to slow to 1.6 percent, the lowest since June 2010. This hints the ECB is being offered increasingly ample room to stimulate growth without worrying about runaway price growth.

This may put downward pressure on the Euro ahead of this week’s interest rate decision. While the central bank is widely expected to maintain the policy mix unchanged, a soft CPI print in the context of lingering recession may prompt the markets to look for a dovish shift in rhetoric foreshadowing added easing on the horizon in the months ahead.

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DAGELIJKSE MARKT ANALYSE 4 APRIL 2013

• Japanese Yen Sinks as BOJ Delivers on Aggressive Stimulus Bets
• US Dollar Gains as USDJPY Rally Bleeds into Other Majors
• British Pound Unlikely to Find Lasting Support in BOE Standstill
• Euro to Fall if ECB Signals Easing Ahead on Deepening Recession

The Japanese Yen plunged in overnight trade, down as much as 2.6 percent against its major counterparts in overnight after the Bank of Japan (BOJ) announced an aggressive expansion in monetary stimulus efforts. Policymakers said they will target an outright expansion of the monetary supply from here, aiming to expand it from ¥138 trillion by the end of last year to ¥200 in 2013 and ¥270 in 2014 with a the goal of achieving a 2 percent inflation target.

The central bank will buy about ¥7.5 trillion in Japanese government bonds (JGBs) per month and lift the restriction on maturities eligible for purchase to achieve a reduction in borrowing costs at the longer end of the yield curve (the previous limit was 3 years). The maturity range for the BOJ’s holdings is expected to be around 6-8 years on average. In addition to JGBs, the BOJ will also purchase ETFs and J-REITs at a pace of ¥1 trillion and ¥30 billion per year, respectively.


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DAGELIJKSE MARKT ANALYSE 5 APRIL 2013

• Dollar Traders Will Interpret NFPs for QE3 Outlook
• Japanese Yen Collapses after BoJ Pulls Out All Stimulus Stops
• British Pound Rebound after BoE Foregoes Stimulus Peculiarly Mild
• Euro Recovers from Troubled ECB Forecast with Look to Balance Sheet
• Canadian Dollar Advances Ahead of Volatility-Inducing Jobs Data
• New Zealand Dollar: Inflation Linked Bond Sales Shows Strong Demand
• Gold Plunge Tempers after BoJ Upgrade, Fed Stimulus Critical


Dollar Traders Will Interpret NFPs for QE3 Outlook
While the USDJPY’s incredible 3.4 percent rally stands a strong sign of the dollar’s inherent value against a fellow ‘safe haven’ currency, the benchmark currency was notably weaker against the balance of the liquid FX market. However, greenback weakness for pairs like EURUSD and GBPUSD are more reflections of hesitance ahead of another wave of serious event risk rather than a sign of weakness. The real market-moving potential for the dollar – and possibly systemic risk interests – comes in the upcoming session’s nonfarm payrolls (NFP).

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DAGELIJKSE MARKT ANALYSE 9 APRIL 2013

• US Dollar Sold After Bernanke Talked Down Asset Sales as Tightening Tool
• British Pound Unlikely to Find Volatility in Industrial Production Data
• Swiss Deflation Expected to Have Accelerate on Franc Increase in March

The US Dollar declined against all of its major counterparts after Federal Reserve Chairman Ben Bernanke said asset sales are expected happen “late” into the monetary policy tightening process. The central bank chief added that the Fed preferred to use the interest rate on excess reserves (IOER) as its principal tool for unwinding stimulus when the time to do so is at hand.

However, that approach has been painted as a less-impactful tightening technique by some skeptics including the Fed’s own Charles Plosser, President of the Philadelphia branch. It appears the markets opted to agree, interpreting Bernanke’s comments to mean that the greenback will find policy support slow to emerge even when the Fed eventually begins to reverse its accommodative posture.

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