Dagelijkse Markt Analyse 11 Januari 2019

DAGELIJKSE MARKT ANALYSE 27 AUGUSTUS 2013

• Dollar Inactivity Seen as Breakout Risk, Not Tranquility
• Japanese Yen Crosses Dropping as Nikkei Drops
• Euro Suffers as ECB Splits on Rate Cut Options, Italian Markets Plunge
• British Pound Returns from Holiday to Speculation on BoE Moves
• Emerging Markets Taking Clearer Steps Towards Outright FX Wars
• New Zealand Dollar Rebound Stymied by Shaky Risk Trends
• Gold Overtakes $1,400 but Intraday Volatility Concerning

Dollar Inactivity Seen as Breakout Risk, Not Tranquility
The Dow Jones FXCM Dollar Index closed out Monday’s session virtually unchanged, which was virtually a repeat of the inactivity on Friday. To some, this quiet following the rebound from two-month lows at 10,650 last week is a relief. In the context that the greenback is holding up while equities have forged a rebound, this can be viewed as intrinsic strength counteracting and overriding an otherwise elemental fundamental theme. However, this can also be viewed as complacency for both currency and capital markets which invariably disregards an inevitable resolution to more elemental market theme. Looking at the USDollar’s chart, there is less than 90 points of room in the past three weeks worth of trade; and the average daily range is approximately 50 points. It isn’t difficult to force a break in these conditions. Furthermore, the S&P 500 has stalled in its recovery effort against August 15th's tumble. There is plenty of ‘justification’ to see equities dive into a deeper correction and thereby drive the dollar higher – a wind down of record levels of leverage, closing a fundamental gap to a markets rate version of fair value, a peak in earnings growth, growth moderation, etc – but until the masses position for these concerns, it should not be considered an active market adjustment. Taper speculation is still seen as the most prominent possible catalyst for a market-wide move, but we need actual fear to evolve from these them rather than just interest rate adjustment. Today, a consumer confidence, home inflation and Fed official commentary may help.

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DAGELIJKSE MARKT ANALYSE 28 AUGUSTUS 2013

• Dollar Unable to Climb on Biggest Drop in Equities in Two Months
• British Pound Positioned for Breakouts, Volatility on Carney Speech
• Japanese Yen Surges Higher as Carry Falls to 12-Month Low
• Emerging Markets Plunge Yet Again, Brazil Rate Decision Ahead
• Euro Steady Despite Equities Plunge, Periphery Yields Climb
• New Zealand Dollar’s Interest Rate Outlook Fading
• Gold’s Recovery Now 20 Percent Strong, Global Risks Offset Taper

Dollar Unable to Climb on Biggest Drop in Equities in Two Months
Global equities took a tumble Tuesday with the S&P 500 suffering its biggest drop since June 20 – theday after the Fed announced it was starting the countdown to the Taper. Yet, despite this seemingly immense ‘risk off’ move, the safe haven dollar was little changed against most of the majors. Once again, we are left to wonder whether the greenback is no longer a safe haven player or whether risk trends run as deep at the stock move would suggest. In the past three months, the Dow Jones FXCM Dollar Index (ticker = USDollar) has maintained its bullish bearing despite stubborn speculative positioning in the capital markets likely on the premise that the Federal Reserve’s plans to moderate stimulus would bolster local yields and thereby confer significant benefit to the currency. This has given the dollar buoyancy and moved it out of the ‘oversold’ territory in which fellow safe haven Japanese yen still finds itself. That does not mean, however, that the currency has lost its reserve properties. The more traction global risk aversion gains – on Syria, stimulus or growth concerns – the dollar will likely rally.

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DAGELIJKSE MARKT ANALYSE 29 AUGUSTUS 2013

• Dollar Gains but Trend First Requires a Serious Breakout
• British Pound: BoE’s Carney Says QE Possible, Cable Rebounds Above 1.5500
• Japanese Yen Rally Stalled as Nikkei and Carry Trade Put in a Weak Bounces
• Euro Looks for Volatility - Not Trend - With Upcoming Event Risk
• Oil Trades above $110 and at a Two-Year High on Syrian Concerns
• Emerging Market Currencies: Indian Rupee Collapse vs Brazilian Real Stability
• Gold Matches Strongest Run in 12 Months…and it’s Not a Reversal Signal

Dollar Gains but Trend First Requires a Serious Breakout
With the exception of NZDUSD, the US dollar posted gains against all of its major counterparts this past session. In turn, we find the Dow Jones FXCM Dollar threatening to turn congestion into a meaningful bull trend with the right encouragement. However, that breakout (technically demarked on the index at 10,760 or below 1.3300 for EURUSD) requires a stronger drive than what the benchmark has mustered to this point. Looking to the fundamental backdrop, the recent tumble in equities, capital outflow from emerging markets and surge in energy prices is a strong tonic for a reserve currency like the greenback. Yet, the risk implications are not yet heavy enough to spark the guttural demand for an ultimate reserve currency that is burdened by the outflow of capital due to foreign Treasury unwindingahead of the Taper. If fear builds to a crescendo where liquidity is prized above all else – a market-wide deleverage from risky assets – both the dollar and US Treasuries will surge.

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DAGELIJKSE MARKT ANALYSE 30 AUGUSTUS 2013

• Euro May Decline if Soft Flash CPI Print Boosts ECB Stimulus Expectations
• Dollar Looks to Read US News-Flow in Terms of Fed QE “Taper” Outlook
• Aussie, NZ Dollars Rise as S&P 500 Futures Point to Risk Appetite Recovery

Augusts’ preliminary Eurozone CPI figure headlines the calendar in European hours. Expectations call for the year-on-year inflation rate to slow to 1.4 percent, the lowest in three months. The Euro continues to track relative monetary policy expectations (as implied by the EU-US 2 year bond yield spread). With that in mind, a soft print may be seen as amplifying the case for additional ECB stimulus and weigh on the single currency.

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DAGELIJKSE MARKT ANALYSE 2 SEPTEMBER 2013

• US Dollar at Risk of Reversal Below Channel Resistance
• S&P 500 Flirting with Key Trend Line Support Levels
• Gold Broke Lower as Expected, Support Seen Sub-1400

US DOLLAR TECHNICAL ANALYSIS – Prices put in a Spinning Top candle below resistance at 10796, the intersection of the 23.6% Fibonacci expansion and the top of a falling channel set from early Jul. The setup warns a move lower may be ahead. A break below initial support at 10760 exposes downside objectives at 10693 and 10646. Alternatively, a reversal above resistance targets the 38.2% Fib at 10882.

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DAGELIJKSE MARKT ANALYSE 3 SEPTEMBER 2013

• Australian Dollar Soars as RBA Holds Off on Signaling Further Rate Cuts
• NZ Dollar Rallied, Japanese Yen Fell as Risk Appetite Firmed in Asian Trade
• US Dollar to Gauge ISM Manufacturing Data in Terms of Fed “Taper” Bets

The Australian Dollar rallied as expected after the Reserve Bank of Australia opted to keep interest rates unchanged at 2.50 percent without signaling further easing in the pipeline over the coming months. In the statement accompanying the announcement, RBA Governor Glenn Stevens said the current setting of monetary policy “remained appropriate”.

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DAGELIJKSE MARKT ANALYSE 4 SEPTEMBER 2013


• Euro, British Pound May Rise on Last Round of August PMI Data
• US Dollar Looks to Beige Book Survey for Fed QE “Taper” Clues
• Aussie Dollar Outperforms as 2Q GDP Bolsters On-Hold RBA Bets

The revised Eurozone Composite PMI gauge is expected to confirm flash estimates putting manufacturing- and service-sector growth at the fastest in 26 months in August. Meanwhile, updated second-quarter Eurozone GDP numbers are due to underscore the region’s exit from recession in the three months through June with an output gain of 0.3 percent.The Euro continues to track the monetary policy outlook as implied by the spread in front-end bond yields. That means outcomes that top forecasts andlower the probability of further ECB easing are likely to buoy the single currency (and vice versa).

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DAGELIJKSE MARKT ANALYSE 5 SEPTEMBER 2013

• Dollar Stumbles as US Stocks Surge, Taper Countdown Continues
• Japanese Yen Crosses Line Up for Breakout Ahead of BoJ Decision
• Australian Dollar’s Data-Driven Rally May Run Out of Steam Without Risk Trends

Dollar Stumbles as US Stocks Surge, Taper Countdown Continues
A global equities rally rounded out by the biggest advance for the US Indexes in two weeks generated enough friction to send the dollar reeling Wednesday. While the greenback has found itself unable to leverage much strength out of risk aversion gusts over the past weeks, the liquidity purveyor nevertheless remains exposed to swells in risk appetite that move capital towards higher yield and in some cases depressed (Australian dollar, emerging market debt, etc) assets. Looking across the majors, there are more than a few pairings dangerously poised for a more prolific anti-dollar move. A more convincing climb in traditional capital market benchmarks (like the S&P 500) and carry interest could secure a near-term break against the greenback – even if the follow through would struggle. Event risk over the next 48 hours is significant and should be considered more trend defining. The G20 meeting doesn’t have a black-and-white outcome but Friday’s NFPs do.

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DAGELIJKSE MARKT ANALYSE 6 SEPTEMBER 2013

• Dollar Traders Ready for Heavy Swings as NFPs Shape Taper Fears
• Japanese Yen Crosses the High Water Mark for NFPs, Taper, Risk Trends
• Euro Drops after ECB’s Draghi Keeps Rate Cut Option

Dollar Traders Ready for Heavy Swings as NFPs Shape Taper Fears
We are making the final pass before the Federal Reserve decides in less than two weeks whether to Taper or not. A reduction in support for the markets seems the consensus, but some markets – the most exposed and leveraged – have attempted to hold back the tide. That resistance could very well collapse should the upcoming August employment figures finally undermine the complacency and expose blatant risks. And so, with the upcoming nonfarm payrolls (NFPs), traders must take close stock of whether the market is tipping into the extremes of sentiment. To gauge there are many assets that can act as barometers but few as effectively as the USDollar and S&P 500.

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DAGELIJKSE MARKT ANALYSE 9 SEPTEMBER 2013


• US Dollar May Be Set to Resume Uptrend After Pullback
• S&P 500 Attempting to Carve Out Base at Key Support
• Gold Prices Poised to Overtake $1400/oz Figure Again


US DOLLAR TECHNICAL ANALYSIS – Prices appeared to have overturned a two-month down trend last week with a break above channel top resistanceset from July’s swing high. Initial resistance was met at 10798, the 23.6% Fibonacci expansion, with a pullback from this barrier now producing a retest of the channel top (10711). A push below that exposes the August 12 low at 10652. Alternatively, a reversal back above resistance aims for the 38.2% Fib at 10888.

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DAGELIJKSE MARKT ANALYSE 10 SEPTEMBER 2013

• Dollar Suffers Critical Breakdown but Do Fundamentals Validate?
• Euro Climbs as Investor Survey Surges, Italy Vote Uncertain
• Japanese Yen Crosses Rally after Nikkei 225 Break Higher

Dollar Suffers Critical Breakdown but Do Fundamentals Validate?
The US dollar suffered a potentially serious blow to start this week. The greenback broke down against most counterparts in the opening session while the Dow Jones FXCM Dollar Index closed below a trendline that has guided the benchmark higher throughout 2013. A simplistic technical read of the situation suggests that we have witnessed a meaningful first step towards a bigger trend shift. However, the need for fundamentals to feed follow through on this new bear trend are even greater now – under current market circumstances – than they would be during ‘normal’ conditions. Trend is found not on the ‘break’ but rather in the follow through. With that said, fostering a sustained dollar selloff whether on standard risk appetite trends or anti-Taper considerations is unlikely with the pivotal September FOMC meeting due next Wednesday.

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DAGELIJKSE MARKT ANALYSE 11 SEPTEMBER 2013


• Dollar Break Finding Limited Follow Through on Equity Rally
• British Pound: Employment Data Could Decide GBPUSD’s Fate at 1.5750
• Japanese Yen Crosses Post Clean Technical Breakouts but Conditions Flimsy

Dollar Break Finding Limited Follow Through on Equity Rally
The S&P 500 extended its charge higher with another 0.7 percent rally this past session. Yet, despite the risk appetite this traditional represents, the safe haven dollar gave up little ground it its three-day slide. This uneven response to speculative positioning tells us that the appetite for higher yielding and thereby more risky assets is not particularly deep. For drive, there was little outside of further de-escalation of an impending US strike on Syria to highlight for fresh risk positioning. Yet, with rebound moves – different from outright rally – from the likes of the S&P 500, carry trade, yen crosses and emerging markets; there is a consistency that we haven’t seen much of lately.

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DAGELIJKSE MARKT ANALYSE 12 SEPTEMBER 2013


• Aussie Dollar Weakness After Soft Jobs Data Likely to be Short-Lived
• Yen Gains as Japanese Stocks Fall, NZ Dollar Rallies on Hawkish RBNZ
• US Dollar Looks to Jobless Claims Figures to Guide Fed “Taper” Bets

The Australian Dollar sank against the majors in overnight trade after Augusts’ Employment report proved deeply disappointing. The report showed the economy shed 10,800 jobs from the prior month, disappointing economists’ calls for a 10,000 increase. The unemployment rate rose to 5.8 percent as expected but the participation rate unexpected declined to 65.0 percent, the lowest since January 2007. This suggests that in addition to layoffs, some frustrated job-seekers gave up looking for employment altogether and dropped out of the labor force.

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DAGELIJKSE MARKT ANALYSE 13 SEPTEMBER 2013

• US Dollar Gains, Aussie and Kiwi Sink Amid Renewed Fed “Taper” Speculation
• Retail Sales, UofM Confidence Figures in Focus as Markets Build Out FOMC Bets
• Lasting USD Rally Unlikely Absent Major Upside Surprises on the Data Front

The US Dollar advanced against the major currencies while stocks declined on Asian bourses as the markets’ attention turned to next week’s FOMC policy announcement. The Australian and New Zealand Dollars bore the brunt of the greenback’s recovery, sliding as much as 0.5 and 0.6 percent respectively.

The baseline scenario calls for a $10-15 billion cutback in asset purchases but the path thereafter remains uncertain. That means the updated set of economic forecasts from the rate-setting committee as well as Chairman Ben Bernanke’s press conference following the policy decision are likely to offer traders plenty of fodder for speculation.

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DAGELIJKSE MARKT ANALYSE 17 SEPTEMBER 2013

• Dollar Gaps Lower, S&P 500 Higher on Fresh FOMC News
• British Pound Looks for Inflation Data to Thwart BoE’s Low Rate Promise
• Gold Eyeing $1,300 Despite the Dollar’s Recent Troubles

Dollar Gaps Lower, S&P 500 Higher on Fresh FOMC News
Is the September Taper off? Forex and capital markets traders alike were caught off guard with a sizable gap on Monday’s open on news relating to the outlook for US monetary policy. However, the headline this time was not directly linked to ‘on / off’ speculation surrounding the probability of a moderated stimulus program come Wednesday’s FOMC meeting. Rather, this sharp and all-encompassing move was derived from speculation on the direction and pace of the central bank’s program well after the first the Taper is on the books. Over the weekend, Lawrence Summers – the frontrunner to replace Fed Chairman Ben Bernanke when he is expected to retire when his term ends in January – announced he was bowing out of the race. That was read by the market as a ‘risk on’ development with the dollar dropping to three-month lows while the S&P 500 advanced to an intraday record high. Yet, the fundamental connection between this headline and the market’s reaction is weak; and this event may have exploited heavy speculation to further exacerbate a market imbalance before serious event risk.

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DAGELIJKSE MARKT ANALYSE 18 SEPTEMBER 2013

• Dollar: Rally or Collapse Depends on FOMC’s Risk Read
• British Pound will US BoE Minutes to Compare UK to US Policy
• Japanese Yen Ready for FOMC Risk Reactions, Keep an Eye on BoJ Response

Dollar: Rally or Collapse Depends on FOMC’s Risk Read
We have finally reached one of the most talked-about event risks in months, and expectations for its impact range from ‘non-event’ to explosive volatility. One thing that traders should appreciate: regardless of immediate volatility, this event will have trend implications. The September Federal Open Market Committee (FOMC) meeting has been pegged as the policy gathering at which the central bank would embark on its effort to rein in its expansive stimulus program – now commonly referred to as the Taper – since Chairman Bernanke laid out a time frame back in June. In the press conference that followed the June 19 rate decision, the captain of the largest stimulus program in history announced that he expected to being reducing the $85 billion-per-month QE3 program ‘later in 2013’ and possibly end it by ‘mid-2014’.

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DAGELIJKSE MARKT ANALYSE 19 SEPTEMBER 2013

• Dollar Suffers Biggest Drop in 14 Months on FOMC’s Taper Surprise
• British Pound Trend Reinforced by BoE Minutes Writing Off Taper
• Gold Posts Biggest Rally in 15 Months as Market Unwinds Recent Slide

Dollar Suffers Biggest Drop in 14 Months on FOMC’s Taper Surprise
The dollar collapsed this past session. Not far removed from three-year highs and still sporting a hefty expectation of an imminent Taper, the Fed’s decision toleave its QE3 program untouched led the Dow Jones FXCM Dollar Index to its biggest drop since last June. Though the 1.3 percent tumble for the greenback may not seem as impressive as the move from Treasuries or gold percentage-wise, the implications are exceptional. This drive adds conviction to a move that was tentatively forming for the past few weeks against discussions of monetary withdrawal and uncertain future for risk trends – both tangible benefits for the safe haven currency. With a drive that ushered EURUSD above 1.3500, AUDUSD through 0.9400 and GBPUSD beyond 1.6100; there is serious pressure on the dollar.

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DAGELIJKSE MARKT ANALYSE 20 SEPTEMBER 2013

• Dollar Rebounds but Bulls Need Risk, Perhaps US Debt Concerns
• Japanese Yen Crosses Rally Across the Board Despite Detrimental Risk Winds
• US Oil Threatens Deeper Reversal as Volatility reading drops to Three-Month Low

Dollar Rebounds but Bulls Need Risk, Perhaps US Debt Concerns
The enthusiasm for yield-bearing and discounted risky assets following the Fed’s surprise ‘No Taper’ decision seems to have stalled quickly. That takes the pressure off the safe haven US dollar, but it doesn’t in turn open the door to a strong recovery. There is no doubt further premium held over from the misplaced assumptions of an immediate wind down of the central bank’s stimulus program that can still be worked off. That potential energy will likely curb easy runs by the troubled benchmark. Yet, there is still room for bulls to fully regain control given a more proactive backdrop for key fundamental themes. Risk aversion is still the most capable possible current to redirect capital flows – and in turn the dollar. We are already seeing a flag in exuberance through this quick stall in benchmarks like the S&P 500 to the extension of the QE3 program. An inevitable exit against the backdrop of excessive leverage and stagnate participation can soon take over the consensus outlook. A definable risk to focus concerns would best serve this scenario however. Coming just in time to flatten stimulus optimism, the debt ceiling debate is heating up once again. A contentious funding measure vote may be held today in order to avert an October 1 federal shutdown.

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DAGELIJKSE MARKT ANALYSE 23 SEPTEMBER 2013

• Aussie Dollar Higher After HSBC China PMI Print Tops Forecasts
• Euro to Advance if Strong PMIs Weigh Against ECB Easing Bets
• US Dollar May Rise if Fed Speakers Imply Mid-2014 QE End-Point

The Australian Dollar outperformed to start the trading week after HSBC reported that its China Manufacturing PMI gauge of factory-sector activity unexpected rose to 51.2 in September, topping forecasts calling for a print at 50.9. China is Australia’s top trading partner and a critical source of demand for the pivotal mining sector. With that in mind, stronger economic news-flow argues against further RBA interest rate cuts, offering support for the currency. Evolving speculation surrounding Federal Reserve monetary policy may disrupt the Aussie’s advance however. Still, we remain long AUD/USD.

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DAGELIJKSE MARKT ANALYSE 24 SEPTEMBER 2013

• Aussie, NZ Dollars Fall with Asian Stocks Amid US Policy Uncertainty
• Euro May Rise After German IFO Data on Waning ECB Easing Outlook
• US Dollar Looks to Consumer Confidence Print to Drive “Taper” Bets

The Australian and New Zealand Dollars declined in overnight trade as Asian stocks followed Wall Street lower, pulling the sentiment-geared currencies along for the ride. The MSCI Asia Pacific regional benchmark equity index fell 0.9 percent. The news-wires chalked up the move to uncertainty over US economic policy.

On the fiscal side, debate is heating up over an increase of the federal spending limit (the so-called “debt ceiling”) once again. Eleventh-hour wrangling over the issue prompted ratings agency Standard & Poor’s to strip the US of its AAA credit rating while citing political dysfunction in 2011. Investors have since taken a cautious posture when similar arguments arise, worrying that constant brinksmanship may soon end in tears.

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