Dagelijkse Markt Analyse 11 Januari 2019

DAGELIJKSE MARKT ANALYSE 20 JUNI 2013

• Dollar Rallies after Fed’s Bernanke Lays Out Taper Timetable
• Japanese Yen: The Bank of Japan’s Troubles Just Doubled
• Euro: Cyprus Backtracks on Bailout Revamp, Troika to Drop IMF?
• British Pound: Incoming BoE Governor has a Lot to Digest
• New Zealand Dollar Stumbles after 1Q GDP Miss
• Swiss Franc Safe Haven Status in Jeopardy with US Tax Fight
• Gold Extends Decline, Eyes April Swing Low after Fed Clears Taper

Dollar Rallies after Fed’s Bernanke Lays Out Taper Timetable
As the market had expected / feared, the Federal Open Market Committee (FOMC) clarified its intentions to Taper stimulus in the near future – and the dollar rallied for it. Having avoided the extreme avenues of simply reducing the monthly, $85-billion-per-month injections this month and simply ignoring the costs of stimulus; the Chairman Ben Bernanke said that the group can reduce its pace of purchases later in 2013 and end the program altogether in mid-2014…data providing. There are certainly requirements to meet before support is curbed, but for a market running on record levels of leverage and over-extended in its search for yield; the eventual exit is a severe threat to a delicate balance.

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DAGELIJKSE MARKT ANALYSE 21 JUNI 2013

• Dollar Extends Rally as S&P 500 Breaks Critical 1,600 Support
• Japanese Yen: Why Isn’t the Carry Trade Unwinding?
• Euro: PMI Improvement Doesn’t Offset Building Greece Fears
• Swiss Franc Takes in US Tax Pressure, EURCHF Floor, Financial Warnings
• British Pound Safe Haven Status for European Funds Seen in EURGBP
• New Zealand Dollar Selling Outpaces Australian Dollar Ongoing Collapse
• Gold Suffers Second Collapse in Two Months, Long-Term Trend Change

Dollar Extends Rally as S&P 500 Breaks Critical 1,600 Support
Risk aversion – which the dollar craves – showed a significant escalation this past session. While we have seen pressure in Chinese funding, a surge in Euro-area sovereign yields and multi-asset volatility swell; what really marks fear is the S&P 500's drop below 1,300. Aside from representing a simple measure of the standard investors’ ‘risk’ exposure, this benchmark is also the most prolific beneficiary of hope founded in Fed stimulus. Therefore, a 2.5 percent decline – the largest daily loss since November 9, 2011 – to break the index’s bull trend for this year is a serious development. Yet, we are still multiple levels below the extreme panic end of the sentiment scale. In a wholesale flight to quality, two critical capital currents will join the fray: an unwinding of carry trade (yen rally) and rally is US Treasuries. The dollar can advance and S&P 500 tumble without these elements, but a mere speculative reversal of Fed exposure is far easier to revert back to the bulls.

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DAGELIJKSE MARKT ANALYSE 25 JUNI 2013


- Dollar Rally Eases as US Stocks Take Another Spill after Fed Chatter
- Euro: German Confidence Rises as Slovenian and Greek Yields Surge
- Japanese Yen: Abe Wins Foothold in Tokyo Ahead of Next Month Elections
- British Pound: Both Mervyn King and Mark Carney Set to Speak
- Australian Dollar Rebounds Across the Board as Bonds Bounce
- US Oil Posts Biggest Rally in Three Weeks
- Gold Slips 1.1 Percent but $1,275 Extends the Bear Trend

Dollar Rally Eases as US Stocks Take Another Spill after Fed Chatter
The US dollar slipped for the first time in six trading days – breaking pace on a bull run that matched the strongest advance for the benchmark since September 2011. What makes this performance particularly surprising was the fact that US equities extended their losses through Monday’s session and two Fed policy officials weighed in with commentary that supported the central bank’s recent turn to a firmer hand on quantitative easing. From the S&P 500, an afternoon rally pulled the benchmark well off its lows. And yet, the benchmark still closed the day down 1.2 percent to a two month low. The market is now of 6.8 percent from its record high and the VIX volatility index suggests fear of a lasting correction is more ‘sticky’ now than it was during last November’s pullback. Adding to speculators’ efforts to time the ‘Taper’, Fed Hawk Richard Fisher said a “significant majority” backed Bernanke last week, while Kockerlakota said the yield rise was not yet “a concern”

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DAGELIJKSE MARKT ANALYSE 26 JUNI 2013


• Dollar Steadies Even as S&P 500 Rebounds, Data Leading to Taper?
• Australian Dollar Advances a Second Day as China Funding Crisis Eases
• Japanese Yen: Asia Market Volatility Remains, Stirs Yen Crosses
• Canadian Dollar the Most Oversold Currency Short Term?
• Swiss Franc: SNB’s Zurbruegg EURCHF Cap Necessary, Risks Can’t be Hedged
• British Pound Traders Take Note of King’s Warning that Carney Limited
• Gold Extends its Plunge to Fresh Multi-Year Lows Overnight

Dollar Steadies Even as S&P 500 Rebounds, Data Leading to Taper?
Both the Dow Jones FXCM Dollar Index and S&P 500 closed the day higher Tuesday. This counter-fundamental, positive correlation tells us something very important: that the ‘risk aversion’ drive that followed the Federal Reserve’s taper warning is losing its potency. If risk aversion were truly intensifying, an unwinding of the front-run-the-Fed trades would evolve into a deleveraging of the exposure that was founded on the assumption of boundless support by the central bank. Yet, there is not enough momentum behind this fear to keep US equities – which are arguably the most stubborn benefactor of the ‘more hazard’ – shedding the uncommitted investors as the benchmarks pull back from record highs. This hesitance should not be taken to mean that the danger of a full-scale bear market has been avoided however. Leverage (measured on the NYSE) is at record highs and participation (S&P 500 futures open interest) at 15-year lows.


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DAGELIJKSE MARKT ANALYSE 27 JUNI 2013

• Dollar Advances Alongside Equities as Market Debates September Taper
• Euro Faces Short-Term Volatility on Data, Lasting Turbulence on Financial Issues
• Japanese Yen: Looking for Stimulus Success in Data, Volatility
• British Pound Drops after BoE Warns of Vulnerability, Osborn Presents Cuts
• New Zealand Dollar Traders: Keep an Eye on RBNZ’s Currency Report
• Swiss Franc: EURCHF Poised for Break as SNB Bulletin Due
• Gold Sets Another Multi-Year Low on Another Jump in Volume

Dollar Advances Alongside Equities as Market Debates September Taper
The positive correlation between the US dollar and S&P 500 is solidifying again – which is a disappointing sign for those looking for an extended and momentous advance for the currency. It is absolutely possible that both the safe haven currency and sentiment-tied benchmark equity index can rise in tandem, but such a climb would be slow and choppy for both. Feeding stocks just off record highs as economic growth maintains a lackluster pace, earnings growth forecasts fade and cheap money evaporates is extraordinarily improbable – borderline impossible. The alternative would be a wave of ‘sidelined’ capital returning to the capital markets. To assume that that will / must happen with asset prices still near record highs falls into the category of ‘hope’. A deleveraging is likely inevitable, and that will no doubt usher a break of the positive correlation and spur the dollar to a much more prolific and momentous climb.

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DAGELIJKSE MARKT ANALYSE 28 JUNI 2013

• Dollar Advances a Third Day as S&P 500 Returns to Critical Level
• Euro: It’s Core Versus Periphery Eurozone Once Again
• Japanese Yen: Market Weighs BoJ Success in Dense Round of Data
• New Zealand Dollar: Does the RBNZ’s Announcing Intervention Help?
• British Pound Drops Against Most of the Majors after GDP Revision
• Swiss Franc: EURCHF Resolves Congestion, Swiss Companies Concerned
• Gold Struggling around $1,200 Just Before the Quarter End

Dollar Advances a Third Day as S&P 500 Returns to Critical Level
Has the market already fully discounted the impact of the Fed 'Taper' ? With the S&P 500 charging higher on its strongest three-day rally in five months, it seems that investors have accounted for – or simply forgotten – the detriment of a smaller stimulus backstop. In the past weeks and months, there has clearly been a positioning shift in recognition that the world’s largest central bank would eventually wean the market of its dependency on supranatural support. The most dramatic adjustments were seen in those assets that were most distinctively exposed either as particular Fed assets or simply via excessive exposure / leverage. The iShares-Barclay’s mortgage-backed securities (MBS) bond fund has retraced half of its gains since 2009 and the 10-year Treasury yield has risen 65 percent in eight weeks. Those are assets the Fed is directly buying. A peak-to-trough 7.5 percent retracement in the S&P 500, 3.2 percent EURUSD drop and average 6.7 percent correction from yen crosses (carry trade) is comparatively tame. Adeeper risk aversion move is highly likely, but the Taper catalyst may have been used up.


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DAGELIJKSE MARKT ANALYSE 2 JULI 2013


• Dollar Rally Stalls Before Breakout as ISM Data Stirs Taper Talk
• Australian Dollar Finds Little RBA Support for Reversal, Rally
• Euro: Does 1.3075 or 1.3000 Break First?
• Japanese Yen: Tankan Report Reinforces BoJ Stimulus Drive
• British Pound Finds Little Volatility on Carney’s First Day at BoE
• Canadian Dollar: Looking to Trade Data for Greater Volatility
• Gold Posts First Back-to-Back Advance in Three Weeks…The Turn?

Dollar Rally Stalls Before Breakout as ISM Data Stirs Taper Talk
Just shy of breaking to fresh three-year highs, the Dow Jones FXCM Dollar Index stalled once again short of 10,875 resistance. While the greenback has drifted higher despite the meandering of risk-based sentiment trends, it seems the escalation to a full-steam bullish run for the benchmark currency requires a more committed drive from the fundamental backdrop. A full-scale risk aversion shift would certainly hit the necessary pitch to throttle the reserve currency into the next gear, but such fears are difficult to engage without the tapping into stimulus expectations. The June ISM Manucturing reportmade an attempt to alter the Taper timetable. However, the stronger-than-expected 50.9 headline reading was offset by the first pessimistic reading on the sector’s labor conditions since September 2009. Jobs fears can push back the stimulus taming, but Friday’s NFPs carry more weight in this area – and there is Thursday’s holiday to worry about as well.

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DAGELIJKSE MARKT ANALYSE 3 JULI 2013

• Dollar Breaks to 3 Year High Before Holiday, Taper Market Shakeup
• Euro Drops Below 1.3000 as Portugal Adds to Growing Crisis Concerns
• Japanese Yen Crosses Advance for the Fourth Day, Capital Flows On Deck
• Australia Dollar Volatility Stirred but Trend Still Illusive after Data Run
• British Pound Advances Despite Business Group’s Call for Stimulus
• US Oil Soars for a Third Day to 14 Month High
• Gold Recovery Stalled by Dollar’s Strong Rebound

Dollar Breaks to 3 Year High Before Holiday, Taper Market Shakeup
The Dow Jones FXCM Dollar Index rallied above 10,875 this past session to break through to fresh three-year highs. This move is partly attributable to risk trends concerns – the S&P 500 has notably failed multiple times to make progress beyond 1,625 – and also has its contributions from Taper speculation. Yet we shouldn’t let the technical breakout for EURUSD below 1.3000 and USDJPY above 100 lead us to complacency. Trades are made on the follow through, not the breakout. And, the momentum behind a bullish dollar theme is highly circumspect moving forward. Immediately ahead of us, we have a round of notable event risk – ISM service sector activity, ADP employment change and US trade. All notable for a growth update, the former two are also key NFP proxies. The national employment report due Friday presents the first update on a key Fed Taper target (the jobless rate) since the group noted their intention to taper later this year. There will be healthy doses of fear and speculation before the data hits Friday…and before that, we have a liquidity drain for the national holiday.


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DAGELIJKSE MARKT ANALYSE 4 JULI 2013

• Dollar Breakout Stalls Immediately on with Liquidity Drain, NFPs Fear
• Euro: Be Ready for an ECB Surprise, Regional Crisis Escalation
• British Pound Risk Bearish with New BoE Leadership
• Australian Dollar Suffers Biggest Selloff in Weeks on Stevens’ Comment
• New Zealand Dollar Bear Trend Contrasts Highest Forecast in Years
• Oil Volatility Threat Eases after Egyptian President Removed
• Gold Returns to Congestion Awaiting Stimulus Decisions from Fed, ECB, BoE

Dollar Breakout Stalls Immediately on with Liquidity Drain, NFPs Fear
We have entered a dangerous period for trading the US dollar and the FX market. In a unique turn of events, the US capital markets will be offline Thursday – and with it a critical cog of the sentiment transmission system will be removed from the machine. Alone, this would lead to high thin trading where volatility is rampant and breakouts fail to find the depth necessary to develop trends. Yet, the situation is even more complicated. In addition to the unusual market backdrop, we are further expecting key event risk through the final 24 hours of this trading week. The unemployment rate is perhaps the most important series for the Federal Reserve’s monetary policy bearings moving forward, and this week’s labor report is the first since Chairman Bernanke announced a loose timetable for the Taper. Adding fuel to the fire, the ADP rose and ISM service sector employment component surged this past session. Steady growth equates to an earlier QE3 breaking.

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DAGELIJKSE MARKT ANALYSE 5 JULI 2013


• Dollar, Equity Traders Prepare for Explosive NFPs Reaction
• Euro Drops, European Shares Rally after ECB Copies Fed
• British Pound Plunges after BoE Says Guidance Coming
• Canadian Dollar Risks Volatility on Local Employment Report
• New Zealand Dollar Alluring with it Soaring Sovereign Yields
• Swiss Franc to Lose its Top Spot for Managing Global Funds?
• Gold Bugs Spurned by ECB, BoE Look for Redemption in NFPs

Dollar, Equity Traders Prepare for Explosive NFPs Reaction
Two weeks ago, Fed Chairman Ben Bernanke announced the central bank’s rough time table for the long awaited, long-feared ‘Taper’. The volatility that followed was turbulent, but the true market shift has been reserved for event risk like the upcoming NFPs. This labor report is exceptionally momentous because it represents the key measure for the central bank and it is the first update we are receiving since the change from a ‘we will maintain the $85 billion-per-month stimulus program in place unless’ to ‘we will reduce the $85 billion-per-month stimulus program unless’ position. Months ago, in an effort to clarify its position with guidance, the Federal Reserve stated plainly that it would maintain its accommodative stance until the jobless rate returned to 6.5 percent and inflation held below 2.5 percent. That is the threshold to shift from easing to tightening, but with the update in June; it is now the expectation that QE3 ends with 7 percent and is curbed before that.


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DAGELIJKSE MARKT ANALYSE 9 JULI 2013

• Dollar Stumble Yet to Reverse Bull Trend, What Would it Take?
• Euro Gains Little Traction on Greece, Portugal Defuse
• Japanese Yen: How Many Pips is Further Evidence of Effective Stimulus Worth?
• British Pound Finds Limited Support on Growth Positive Data, Bigger Waves Ahead
• Canadian Dollar Slides as Lending, Business Sentiment Cool
• Swiss Franc Drops as Banking Secrecy Breaks Down, Data Improves
• Gold Rebounds to Start the Week though Conviction Still Lacking

Dollar Stumble Yet to Reverse Bull Trend, What Would it Take?
Having marked a critical, bullish rally just this past Friday; the Dow Jones FXCM Dollar took a concerning break to open this week. The 0.3 percent retreat by the benchmark index was the steepest in over three weeks and was backed by a market-wide decline against all of its major counterparts. Yet, it would be premature to call Monday’s performance a true reversal of trend. Over the past month, USDollar has rallied over 500 points – a move that effectively drove the index to three-year highs. We can see the same impressive performance – and comparatively mild correction – in pairs like EURUSD at 1.2800, GBPUSD at 1.4850, USDJPY above 101 and AUDUSD keeping to 0.9050.

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Dagelijkse Markt Analyse 10 Juli 2013


• Dollar Regains Traction, Drives EUR/USD Below 1.2800
• Euro Drops as IMF Growth Outlook, Italy Credit Rate Downgraded
• British Pound Slips Despite Data, Forces GBP/USD to Three-Year Lows
• Japanese Yen: Officials Look to Change CPI Measure, Wages to Ensure Inflation
• Australian Dollar Climbs Alongside ASX, Discounts Chinese Data
• New Zealand Dollar Tuesday’s Top Performer as Rate Outlook Leverages Risk
• Gold Climb Slows Ahead of $1,265, Futures Open Interest Climbing

Dollar Regains Traction, Drives EUR/USD Below 1.2800
Despite the remarkably consistent climb for the S&P 500 – normally a reflection of rising risk appetite – the dollar revived its bid for multi-year highs Tuesday. The positive correlation between reserve currency and risk benchmark remains in place – indicative of a market that doesn’t have strong convictions for either greed or fear. Without a strong bearing for speculative appetite though, both the dollar’s and equity market’s climb grow increasingly difficult to sustain. For the greenback, a jolt of strength is particularly important now. This past session, EURUSD marked a critical break below 1.2800 – blatant support for the past 9 months. Yet, a technical move (not even one from the FX market’s most liquid pairing) doesn’t itself secure follow through. With the Dow Jones FXCM Dollar Index stationed below 11,000, conviction is essential.

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DAGELIJKSE MARKT ANALYSE 11 JULI 2013

• US Dollar Tumbles as Bernanke Reins in QE “Taper” Speculation
• Buoyant Risk Appetite Points to Continued Dollar Selling Ahead

The US Dollar tumbled in overnight trade, losing as much as 1.5 percent on average against its top counterparts, as Asian markets responded to yesterday’s “dovish” commentary from Federal Reserve Chairman Ben Bernanke. The central bank chief pushed back against speculation about a near-term reduction of QE, reminding investors that the “overall thrust” of policy remains highly accommodative. Bernanke added that inflation and job growth trends signal that more Fed stimulus is needed.


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DAGELIJKSE MARKT ANALYSE 12 JULI 2013

• Dollar Suffers Biggest Two-Day Drop in 20 Months after FOMC Minutes
• Euro: Trouble with Greece, Portugal, Others Contradicts Currency Strength
• Japanese Yen Crosses Unable to Rally Despite Positive Risk Bearing
• Australia Dollar Ignores Equity Rally, Stumbles after Jobs Report
• British Pound Advances after Miles Says FLS Insurance
• Canadian Dollar Has Little Trouble Rallying Versus US Dollar Unlike AUD, NZD
• Gold Breaks Above $1,265 but Conviction Far Weaker than USD, S&P 500

Dollar Suffers Biggest Two-Day Drop in 20 Months after FOMC Minutes
The US dollar was on the chopping block for a second day through Thursday as the fallout from the FOMC minutes continued to eat away at the currency’s run to multi-year highs. Speaking to the rout the greenback has been dealt, the currency closed the past session down against all of its major counterparts, and the Dow Jones FXCM Dollar Index suffered its biggest two-day drop since November 30, 2011. For EURUSD, the two day dollar sell-off led to its best two-day rally since January 2011 – notably the start of a significant bull leg for the benchmark pair. What makes the reserve currency’s performance so remarkable though isn’t its intensity but rather the contrast it draws from the S&P 500. The benchmark spot equity index has risen for six consecutive trading days – its most consistent advance in four months. With the dollar tumbling and equities rising, it would seem that the ‘risk on’ / ‘risk off’ theme is once again in charge – to the detriment of the safe haven.


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DAGELIJKSE MARKT ANALYSE 15 JULI 2013


• US Dollar May Rise as Retail Sales Data Boosts Fed QE “Taper” Speculation
• Aussie Dollar Gains as Chinese 2Q GDP Fails to Advance Case for RBA Cuts

The economic calendar is quiet in European trading hours, with Switzerland’s Producer and Import Prices data amounting to the only bit of noteworthy event risk on the docket. This is likely to see traders looking ahead to US Retail Sales figures as speculation about the direction of Federal Reserve monetary policy remains a driving theme around the financial markets.


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DAGELIJKSE MARKT ANALYSE 16 JULI 2013


• Dollar Little Moved, S&P 500 Extends 8 Day Rally Ahead of Bernanke
• Euro Refuses to Cave Despite EFSF Downgrade, Lingering Portuguese Fears
• British Pound: CPI Expected to Return to 3.0% - What Will the BoE Do?
• Australia Dollar Ignores Chinese 2Q GDP but Rallies on RBA Minutes
• New Zealand Dollar Response to 13-Year CPI Reading Restrained
• Japanese Yen Slides as Carry Benefits Shrinking Volatility Concerns
• Gold Virtually Unchanged for Second Trading Day

Dollar Little Moved, S&P 500 Extends 8 Day Rally Ahead of Bernanke
The dollar is facing down serious breakout potential, but the will for a serious breakout and trend development simply isn’t there. With the Dow Jones FXCM Dollar Index stationed once again just below its confluence of series-long Fibs and trendline around 10,900 and EURUSD having worked its way into a ‘terminal’ wedge formation, it would seem that a trend-defining move is imminent. Yet, fundamentals can actually work to curb the development of any meaningful breakout attempt within the next 24 hours. As tantalizing as technical setups are in the short-term, it is follow through that provides FX market participants with trades. However, jumping into a trade ahead of what is likely to be very heavy fundamental seas is seen by most as unnecessarily risky. The problem with taking a trade on something like the upcoming US CPI, TIC capital flows or Goldman Sachs earnings for example is that Wednesday’s Bernanke testimony carries far more weight.

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DAGELIJKSE MARKT ANALYSE 17 JULI 2013

• Dollar or S&P 500 – One to Reverse if Fed Mentions Taper
• Euro: Trouble Grows as Portugal 2014 GDP Forecast Slashed
• British Pound Traders Focus on BoE Minutes, Jobs Data
• Canadian Dollar Set for its First BoC Decision Under New Leadership
• Japanese Yen: Policy Officials Hope Bernanke Forestalls Taper Fears
• Australian Dollar Firms as Speculation of RBA Rate Cut Eases
• Gold Ready to Break $1,300 if Fed Testimony Keeps $85 Billion Through Year End

Dollar or S&P 500 – One to Reverse if Fed Mentions Taper
We are coming on the top event risk for this week: Fed Chairman Ben Bernanke’s testimony on monetary policy before the US House of Representatives. This particular event can single-handedly leverage a trend-defining reversal in the dollar or S&P 500. To establish just how market moving this event risk can be, we only need to look back a week. With the release of the FOMC minutes – the transcript of the last policy gathering – the Dow Jones FXCM Dollar suffered a 90-point drop, its biggest in five weeks. Before that, the June 19 Fed meeting sparked a massive 115-point USDollar rally and painful 3.9 percent, two-day US equities tumble. In both events, there was fodder to alter speculation surrounding the time frame for the central bank’s first reduction in QE3 – conveniently termed ‘The Taper’. However, more interesting from the reaction was establishing just how sensitive the market was to the change and what part speculation plays.

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DAGELIJKSE MARKT ANALYSE 18 JULI 2013


• Dollar and S&P 500 Volatility Risk Not Defused by Bernanke Testimony
• British Pound Biggest Fundamental Mover on Strong Jobs, Surprise BoE Minutes
• Euro Slides after Bank of Italy Downgrades Growth Outlook, Weak Portugal Bond Sale
• Canadian Dollar Welcomes New BoC Governor with a Retreat
• Australian and New Zealand Dollar Gauge Relative Strength
• Japanese Yen: Bank of Japan Receives a Vote of Confidence from Bernanke
• Gold Rejected at $1,300 as Bernanke Avoids Taper Relief, BoE Shirks QE

Dollar and S&P 500 Volatility Risk Not Defused by Bernanke Testimony
Fed Chairman Ben Bernanke played the monetary policy game well this past session. He managed to defuse what was an extreme volatility event by carefully negotiating his testimony without feeding speculators’ expectations for Taper plans. And yet, he has just made an inevitable and necessary development from the market’s that much more difficult to trade. Looking to the S&P 500, we have a depiction of risk trends loitering at record highs without conviction for further advancement. Alternatively, the safe haven US dollar hasn’t retreated as the market goes on the hunt for yield nor rallied as the peak in stimulus is realized. This ‘stability’ would be more encouraging it weren’t so clearly an uneasy-quiet that is represented by an array of technical patterns that threaten near-term breakouts. Looking back at the Chairman’s rhetoric before the Senate, he did not alter the time table for a Taper later this year – the consensus is still September. That said, he did invalidate the skeptics hopes of a steady build in stimulus. Furthermore, the Beige Book released later proffered an economic assessment that read like justification for reducing external support. A breakout – bullish or bearish – is necessary for the dollar and S&P 500, but the trigger will be less obvious.

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DAGELIJKSE MARKT ANALYSE 19 JULI 2013


• Dollar May Not Retest Three-Year High Without a Jolt of Volatility
• Euro Unable to Overtake 1.3200 Despite Portugal’s GDP Call
• British Pound Extends Climb, GDP Outlook May Force 1.5250
• Japanese Yen Slowly Retreats as EURJPY Posts 7th Straight Advance
• Canadian Dollar Tops Trading Day on Sales Data
• US Oil Rally Revived, Spread to Brent Smallest in Nearly 3 Years
• Gold: Anecdotal Reports of Physical Demand Doing Little for Bulls

Dollar May Not Retest Three-Year High Without a Jolt of Volatility
The dollar needs volatility to remount its charge to three-year highs on the Dow Jones FXCM Dollar Index and drive EURUSD back below 1.3000. In volatility, traders see fear. And, with uncertainty the masses seek out the comfort of established safe havens. Therein lies the greenback’s most productive fundamental catalyst. That said, risk has cooled significantly. With the S&P 500 testing fresh record highs and the equity-based VIX sliding to an eight-week low this past session, there is little impetus to rally the bulls. Then again, it is fundamentally important to note that the suggestion of ‘positive’ sentiment measured in the capital markets hasn’t materially hurt the benchmark currency either. This reflects a lack of engagement in risk trends and an exaggerated influence of stimulus expectations

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DAGELIJKSE MARKT ANALYSE 23 JULI 2013

• Dollar Retreats to Critical Support, Awaiting Fundamental Ignition
• Euro Finds Limited Reassurance from Portugal Resolution
• Japanese Yen Slides, Nikkei 225 Climbs after Election Results
• British Pound Wins GBPUSD Breakout, Crosses May Wait for GDP
• Australian Dollar Traders Will Renew Rate Speculation on 2Q CPI Release
• New Zealand Dollar: NZDJPY Breakout with Trade Data?
• Gold: How Far Does the $1,300 Breakout Project?

Dollar Retreats to Critical Support, Awaiting Fundamental Ignition
The US dollar took a hit to open this week with the benchmark currency flashing red against all its major counterparts and suffering tentative technical breaks with a few of its pairings (EURUSD and GBPUSD). There was some measure of fundamental support for this unfavorable move, but the greenback’s intraday dive didn’t line up to the calendar items. The Chicago Fed’s National Activity Index for June bolstered concerns about growth with a -0.13 reading, while existing home sales unexpectedly dropped 1.2 percent to a 5.08 million pace. Where this data truly carries its weight is the degree that it lowers Fed officials’ expectations for economic activity and thereby delays the call for the dreaded / anticipated Taper. While notable indicators, this data has likely done little to tip the scales in the timing of the Fed’s moderation of its $85 billion-per-month stimulus program. The economic docket is likely to carry limited influence over shaping the consensus for policy timing this week – especially with the combination of the 2Q US GDP, July NFPs and a FOMC rate decision scheduled for next week. In the meantime, an updated Reuter’s poll showed 33 of 56 economists sampled expect the Taper to begin in September.

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