Dagelijkse Markt Analyse 11 Januari 2019

DAGELIJKSE MARKT ANALYSE 3 MAART 2014

• US Dollar Continues to Cling to 17-Month Trend Support
• S&P 500 Recoils Downward After Setting New Record High
• Crude Oil Hits 5-Month High, Gold at Familiar Resistance

US DOLLAR TECHNICAL ANALYSIS – Prices continue to consolidate above support at a rising trend line set from September 2012. A break above resistance at 10614, the 23.6% Fibonacci expansion, initially exposes the 38.2% level at 10673. Trend line support is now at 10554, with a reversal below that eyeing the February 17 low at 10520.

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DAGELIJKSE MARKT ANALYSE 4 MAART 2014

• Dollar Tracks Asian Stock Indices Higher on Upbeat US Economic Data
• British Pound May Come Under Pressure on Soft Construction PMI Print
• Yen Likely to Outperform if Ukraine Crisis Catalyzes Further Risk Aversion

The US Dollar outperformed in overnight trade in a move that seemed to reflect Asian markets’ response to upbeat set of US economic data. January’s upbeat Personal Income and Spending figures as well as a better-than-expected February Manufacturing ISM print helped reconcile the disparity between soft US news-flow and the Federal Reserve’s commitment to “tapering” QE asset purchases on display since mid-January.

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DAGELIJKSE MARKT ANALYSE 5 MAART 2014

• Euro to Look Past PMI and GDP Revisions, Focus on ECB Outcome
• Pound May Fall as Soft PMI Data Highlights Eroding BOE Outlook
• Japanese Yen to Rise Anew if Ukraine Tensions Spark Risk Aversion

The final revision of February’s Eurozone Composite PMI is expected to confirm initial estimates showing the pace of manufacturing- and service-sector activity growth narrowly slowed compared with January. Separately, a revised fourth-quarter Eurozone GDP reading is forecast to mirror the preliminary print showing the economy added 0.3 percent, marking an improvement from the 0.1 percent increase recorded in the three months through September.

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DAGELIJKSE MARKT ANALYSE 6 MAART 2014

• Euro Gains to be Limited on Status-Quo ECB Interest Rate Decision
• Bank of England Monetary Policy Announcement Likely a Non-Event
• Ukraine Crisis Still a Potential Trigger for Risk Aversion, Yen Gains

A monetary policy announcement from the European Central Bank (ECB) headlines the economic calendar in the hours ahead. Stubborn disinflation has fed speculation a possible move to ease monetary policy, and with good reason. A gauge of regional inflation expectations (derived from bond yields) is hovering near two-year lows while the benchmark year-on-year CPI measure of the price growth rate sits near the lowest levels since late 2009.


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DAGELIJKSE MARKT ANALYSE 7 MAART 2014

• Major Currencies Quiet in Asia, Focus Now on US Employment Report
• Persistent Disappointment is the Established Status Quo for US Releases
• Dollar May See Disproportionate Response to Good vs. Bad Jobs Data

The major currencies are little changed in overnight trade as investors withhold directional conviction ahead of the much-anticipated US Employment report due in the hours ahead. Expectations call for nonfarm payrolls to rise 149,000 in February, marking the largest increase in three months. The unemployment rate is expected to print at 6.6 percent, unchanged from January.

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DAGELIJKSE MARKT ANALYSE 10 MAART 2014

• Quiet European, US Economic Calendars Put Spotlight on “Fed-Speak”
• US Dollar May Rise if Pro-Taper Evans Comments Follow NFP Report
• Aussie Falls, Yen Gains as Chinese Exports Fall Most Since August 2009

A quiet economic data docket in European and US trading hours offers little in terms of market-moving event risk. On the official commentary front, Chicago Fed President Charles Evans is due to come across the wires. While Mr Evans is not a member of the policy-setting FOMC committee this year, traders may be atypically responsive to any clues about the central bank’s thinking that he offers given the absence of other catalysts. Rhetoric supportive of continued “tapering” of QE asset purchases in the context of Friday’s upbeat US employment data may drive the US Dollar higher after prices found support near February’s lows.

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DAGELIJKSE MARKT ANALYSE 11 MAART 2014


• Euro May Face Selling Pressure as the ECB Reveals Bank Stress Test Criteria
• Japanese Yen May Rise as S&P 500 Futures Hint at Oncoming Risk Aversion
• Aussie Dollar Edges Higher as Asian Shares Correct After Yesterday’s Selloff

A relatively muted economic calendar in European and US trading hours may see investors focus on operational details of the ECB’s bank stress tests to be conducted as part of the central bank’s Asset Quality Review (AQR). We noted earlier in the week that the AQR’s completion is a likely pre-requisite for Mario Draghi and company to expand stimulus measures.

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DAGELIJKSE MARKT ANALYSE 12 MAART 2014

• US, European Economic Calendars Light on Fundamental Event Risk
• Euro May Fall if ECB Officials Continue to Talk Up Stimulus Options
• Australian Dollar Sold as Asian Stocks Drop on China Growth Fears

Another quiet day on the economic data front will put the spotlight on a busy ECB speaking calendar. No less than five of the central bank’s officials are due to cross the wires throughout the session. The Euro posted its largest daily drawdown in a week yesterday after comments from ECB Vice President Vitor Constancio and board member Sabine Lautenschlaeger.

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DAGELIJKSE MARKT ANALYSE 13 MAART 2014

• Australian Dollar Soars as Jobs Report Shows Biggest Gain in 2 Years
• Kiwi Dollar Higher as RBNZ Signals Start of Interest Rate Hike Cycle
• US Dollar May Rise on Retail Sales Data, Pro-Taper Fischer Rhetoric

The Australian Dollar outperformed in overnight trade after the Employment report showed the economy added 47,300 jobs in February, marking the largest increase in nearly two years. An 80,500 surge in full-time hiring – the largest monthly increase since August 1991 – was particularly noteworthy.

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DAGELIJKSE MARKT ANALYSE 14 MAART 2014

• Gold breaks $1,370 as emerging markets concerns continue
• Copper falls to multi-year low while WTI struggles at $98.30
• US Consumer Confidence figures may face muted response

Gold has broken above the $1,370 level while copper and crude oil flounder as elevated uncertainty surrounding emerging markets continues to erode investor confidence. The catalyst for a shift in risk-sentiment remains to be seen as the market shrugged off positive US data overnight, suggesting the potential for a lacklustre reaction to upcoming Consumer Confidence figures.

Ukraine and China Concerns Sap Sentiment
Gold is heading for its sixth straight weekly gain as ongoing turmoil in Eastern Europe has created caution amongst investors and bolstered safe-haven demand for the precious metal. With Russia seemingly unphased by the prospect of sanctions from the West, the standoff may linger, which could see gold continue to be well-supported.

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DAGELIJKSE MARKT ANALYSE 17 MAART 2014

• Euro Volatility Risk Skewed to the Downside on Revised Eurozone CPI Data
• Aussie Dollar Drops, Yen Rallies as Crimea Votes to Leave Ukraine for Russia
• Geopolitical Stress Proves Transitory, Monitoring Follow-On Theatrics Key

The final revision of February’s Eurozone CPI data headlines the economic calendar in European hours. Expectations suggest flash estimates putting the headline year-on-year inflation rate at 0.8 percent will be confirmed. A revision downward may sting the Euro amid speculation the ECB will be forced to expand stimulus efforts to counter persisting disinflation. An upgrade may produce the opposite effect, but follow-through is likely to be limited: ECB standstill represents the established status-quo and data arguing for more of the same is unlikely to materially bolster the single currency. We have now sold the Euro against the British Pound.

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DAGELIJKSE MARKT ANALYSE 18 MAART 2014

• Gold retreats to $1,360 as traders look past Ukrainian turmoil
• Crude oil dips as supply disruptions appear less likely
• Precious metals reaction to US CPI data may be muted with FOMC in focus

Crude oil has resumed its downward trajectory alongside declines in the precious metals space as traders look past the ongoing standoff between Russia and the West. Upcoming German ZEW figures may prove noteworthy for the commodities space given their potential impact on risk trends, while US CPI data may elicit a limited response from goldas traders likely focus on the upcoming FOMC rate decision.

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DAGELIJKSE MARKT ANALYSE 19 MAART 2014

• Major Currencies Treading Water as Markets Await FOMC Announcement Outcome
• US Dollar May Rise if Fed Forecasts, Yellen Rhetoric Support QE “Tapering” Cycle
• British Pound Vulnerable if BOE Minutes Hint at Longer Delay of Interest Rate Hikes

The major currencies are treading water in late Asian trade as traders withhold directional conviction ahead of today’s much-anticipated FOMC monetary policy announcement. This time around, the statement following the sit-down will be accompanied by an updated set of official economic projections from Federal Reserve official and the first press Chairman’s press conference from Janet Yellen.

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DAGELIJKSE MARKT ANALYSE 20 MAART 2014

• Dollar Posts Biggest Rally in 6 Months after FOMC
• British Pound Gets the Go Ahead to Advance from BoE
• Euro’s Period of Quiet May be Running Out

Dollar Posts Biggest Rally in 6 Months after FOMC
The Dow Jones FXCM Dollar Index (ticker = USDollar) – facing the close of a tight trading range – found an explosive breakout on the back of the FOMC rate decision. A breakout was a practical necessity, but the severity of the dollar’s rally reflects upon a fundamental event that can engage the currency and broader capital markets moving forward. For USDollar, the news of the third $10 billion Taper and traders’ interpretation of a more timely return to a rate hike regime for the Fed translated into the index’s biggest single-day rally in six months.

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DAGELIJKSE MARKT ANALYSE 21 MAART 2014

• Australian Dollar Outperforms as Asian Stocks Recover from Post-FOMC Selloff
• Japanese Yen May Rise as FTSE 100 Stock Futures Hint at Risk Aversion Ahead
• Comments from Fed’s Kocherlakota May Drive Volatility into the End of the Week

The Australian Dollar outperformed in otherwise quiet overnight trade. The currency advanced alongside futures tracking Australia’s benchmark ASX/S&P 500 stock index, pointing to firming risk appetite as the catalyst behind the move. Asian shares corrected higher after a massive selloff yesterday that pushed the MSCI Asia Pacific regional composite equities gauge to yield its worst one-day drop since August. That move reflected a hawkish turn in Fed policy expectations in the wake of the FOMC policy meeting.

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DAGELIJKSE MARKT ANALYSE 24 MAART 2014

• Euro May Decline on Soft PMIs But Follow-Through Questionable
• Japanese Yen Down as Asian Stocks Rise, Eroding Haven Demand
• Australian Dollar Losses Prove Short-Lived After China PMI MIss

The preliminary set of March Eurozone PMI figures headlines the economic calendar in European hours. The region-wide composite index is expected to show manufacturing- and service-sector activity growth slowed for the first in four months. Signs of softer performance may drive speculation about deepening disinflation, fueling ECB stimulus expansion bets and weighing on the Euro. Follow-through may be limited however.

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DAGELIJKSE MARKT ANALYSE 25 MAART 2014

• Euro May Weaken on IFO Survey But Follow-Through Likely Limited
• Soft UK CPI Report May Erode BOE Policy Outlook, Weigh on Pound
• Aussie and NZ Dollars Rise, China Fiscal Stimulus Bets Possible Driver

Germany’s IFO Survey of business confidence is expected to reveal the first decline in sentiment in five months. The headline Business Confidence index is forecast to tick down to 110.9 in March having hit the highest level since July 2011 at 111.3 in the prior month. A downbeat reading may apply near-term downward pressure on the Euro, particularly if it is shown to reflect disappointment in the ECB’s inaction despite persistent disinflation and sliding price growth expectations (as priced into bond yields). Follow-through may be limited however considering the outcome’s limited implications for near-term monetary policy as Mario Draghi and company wait for the outcome of the Asset Quality Review (AQR) before making their next move.

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DAGELIJKSE MARKT ANALYSE 26 MAART 2014

• Gold and silver vulnerable to further declines as geopolitical risks abate
• Copper’s bounces to critical $3.00 level on China stimulus speculation
• $100 handle continues to cap crude oil gains ahead of inventories data

Gold has been given a reprieve in recent trading as it wavers around the $1,310 level, which follows on from Monday’s dramatic decline of over $26. Meanwhile copper has rebounded back to the key $3.00 handle with newswires attributing the bounce to speculation over fresh stimulus from Chinese policy officials. An upside surprise to US Durable Durable Goods orders data due in the session ahead may bolster demand for growth-sensitive commodities like copper. However, WTI may struggle to break the $100 handle on the back of another weak inventoriesreport.

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DAGELIJKSE MARKT ANALYSE 27 MAART 2014

• NZ Dollar Rallies as Bond Auction Hints at Supportive RBNZ Policy Outlook
• British Pound May Not Yield a Strong Response to a Slowdown in Retail Sales
• US Dollar May Find Support as 4Q GDP Upgrade Bolsters Fed Taper Bets

The New Zealand Dollar outperformed in otherwise quiet overnight trade. The rally appeared to be catalyzed by the outcome of a bond auction, where the government sold NZ$200 million in 3 percent coupon bonds maturing in 2020. The bid-to-cover ratio, a measure of demand, fell to 2.84 compared with 5.05 at an auction of analogous paper in February.

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DAGELIJKSE MARKT ANALYSE 28 MAART 2014

• Euro May Extend Drop as Soft German CPI Fuels ECB Stimulus Bets
• British Pound Likely to Overlook Final Revision of 4Q UK GDP Data
• US Dollar May Bounce if UofM Revision Tops Economists’ Forecasts

March’s preliminary German CPI report headlines the economic calendar in European hours. Expectations call for the headline year-on-year inflation rate to decline to 1.1 percent, the lowest since August 2010. Weak price growth readings in the Eurozone’s largest economy may fuel concerns about continued disinflation region-wide and drive speculation about a near-term expansion of ECB stimulus efforts, weighing on the Euro. The single currency dropped to a three-week low yesterday.

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