Dagelijkse Markt Analyse 11 Januari 2019

DAGELIJKSE MARKT ANALYSE 19 DECEMBER 2014

• Return of Year-Capital Flows May Reboot Pre-FOMC Price Action Trends
• Yen Down, Aussie and NZ Dollars Higher as Risk Appetite Swells Overnight

The safe-haven Japanese Yen slumped while the sentiment-geared Australian and New Zealand Dollar advanced as risk appetite firmed overnight. The MSCI Asia Pacific regional benchmark stock index rose 1.1 percent in a move that appeared to reflect follow-on momentum from a sharp rally on Wall Street. S&P 500 futures are pointing firmly higher head of the opening bell in Europe, hinting at more of the same through the end of the trading week.

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DAGELIJKSE MARKT ANALYSE 29 DECEMBER 2014

• Aussie, NZ Dollars Rise as Yen Weakens on Firming Risk Appetite in Asia
• Euro May Fall on Sovereign Risk Fears if Greece Triggers Snap Election

The major currencies were little-changed in the overnight session as markets came on-line for another holiday-shortened trading week. The Japanese Yen came under pressure early in Asian trade as stocks advanced, sapping demand for the safety-linked unit, but the move fizzled on approach to the opening bell in Europe. The sentiment-geared Australian and New Zealand Dollars managed to hold on to modest gains however.

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DAGELIJKSE MARKT ANALYSE 30 DECEMBER 2014

• Japanese Yen Higher on Haven Flows as Stocks Decline in Asian Trade
• US Dollar May Not Find Strength in Upbeat Consumer Confidence Data

The Japanese Yen outperformed in overnight trade, rising as much as 0.3 percent on average against its leading counterparts. The move mirrored losses on Asian stock exchanges, pointing to haven demand as the catalyst behind the safety-linked currency’s advance. The MSCI Asia Pacific regional benchmark equity index fell 0.1 percent.

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DAGELIJKSE MARKT ANALYSE 31 DECEMBER 2014

• US Dollar May Break Downward From Consolidation Range
• SPX 500 Technical Positioning Warns a Downturn is Ahead
• Crude Oil at Risk of Deeper Losses, Gold Prices Aim Higher


US DOLLAR TECHNICAL ANALYSIS – Prices have flat-lined after hitting a five-year high, with negative RSI divergence warning a downturn may be ahead. Near-term resistance is at 11577, the 38.2% Fibonacci expansion, with a break above that on a daily closing basis exposing the 50% level at 11648. Alternatively, a turn below the 11489-522 area marked by the December 8 top and the 23.6% Fib clears the way for a test of the 14.6% expansion at 11434.

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DAGELIJKSE MARKT ANALYSE 5 JANUARI 2015

• Euro Falls on Building Greece Instability Fears Before Jan 25 Election
• EURUSD Falls Below 1.1900 Figure For the First Time Since 2006

A poll conducted by the Rass polling agency shows that the Syriza party is leading the ruling New Democracy party by 3.1 percentage points. The snap election on January 25 comes after the government failed to elect the new head of state. The Syriza party has said it wants to roll back some of the austerity measures imposed by the IMF and the EU as part of Greece’s bailout agreement. The markets are concerned that a Syriza victory will fuel renewed Greek sovereign debt problems which may – in the worst case scenario – lead to the country’s exit from the Eurozone.

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DAGELIJKSE MARKT ANALYSE 6 JANUARI 2015

• US Dollar May See Deeper Losses as Soft ISM Data Weighs on Fed Outlook
• British Pound May Stabilize as PMI Figures Arrest Slide in BOE Expectations

The US Dollar broadly declined in overnight trade, falling as much as 0.4 percent on average against its leading counterparts. The move appeared to reflect continued response to dovish comments from San Francisco Fed President John Williams, who will rotate into a voting position on the rate-setting FOMC committee this year. Williams said there is “no reason whatsoever to rush tightening”, adding the economy still needs policy accommodation and hinting the first post-QE rate hike may appear late in 2015.

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DAGELIJKSE MARKT ANALYSE 7 JANUARI 2015

• Euro May Bounce if December Inflation Data Proves Better Than Forecast
• US Dollar Vulnerable if FOMC Minutes Undermine Hawkish Fed Outlook
• Japanese Yen Corrected Lower Overnight After 2 Days of Aggressive Gains

December’s preliminary Eurozone CPI data is in focus in European trading hours. The benchmark year-on-year inflation rate is expected to drop into deflationary territory for the first time since November 2009, reflecting a 0.1 percent decline. While the trajectory of price growth readings has undeniably pointed lower for some time, realized outcomes relative to expectations have actually improved over recent months. That suggests analysts may be overestimating the severity of the slide into deflationary territory, opening the door for an upside surprise. Such a result may cool ECB stimulus expansion bets, boosting the Euro as prices test pivotal chart support.

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DAGELIJKSE MARKT ANALYSE 8 JANUARI 2015

• British Pound May Not Find Fuel in Bank of England Policy Announcement
• Yen Declines, Aussie and NZ Dollars Gain as Risk Appetite Swells Overnight

A monetary policy announcement from the Bank of England headlines the economic calendar in European trading hours. While UK economic news-flow has cautiously improved since December’s sit-down, the outlook is not so robust as to expect the hawks to build the voting majority needed to produce a hike. Indeed, futures pricing implies the first increase in the benchmark lending rate will not arrive until the fourth quarter. The BOE typically doesn’t publish a statement when policy is left unchanged, so today’s announcement will probably amount to a non-event for the British Pound.

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DAGELIJKSE MARKT ANALYSE 9 JANUARI 2015

• Dollar: Looking Beyond the Flash of NFPs Volatility
• Euro Traders Confident in Stimulus, Not Concerned Enough About Greece
• British Pound Facing CPI Next Week After a Long Tumble on Rate Forecasts

Dollar: Looking Beyond the Flash of NFPs Volatility
A market that is already prone to volatility and a top market-moving piece of event risk make for a dangerous combination. But, that is what we are heading into with Friday’s session. With the USDollar (Dow Jones FXCM Dollar Index) nudging out a fresh six-year high and the S&P 500 extending its frenzied recovery, the stage is set for the December nonfarm payrolls. The notorious labor report is due at 13:30 GMT and the financial headlines it will generate will no doubt be dramatic. However, the actual market impact this data leverages can be significantly skewed by the fundamental currents that have stirred these past months.

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DAGELIJKSE MARKT ANALYSE 12 JANUARI 2015

• Aussie Dollar Gains Alongside Bond Yields, Yen Higher Amid Risk Aversion
• Dovish Fed-Speak May Undermine Rate Hike Outlook, Pressure US Dollar

The Australian Dollar outperformed in overnight trade, rising as much as 0.5 percent on average against its major currency counterparts. The move tracked an advance in front-end Australian bond yields, pointing to a firming RBA monetary policy outlook as the catalyst behind upside momentum. We noted in our weekly outlook that the Aussie appears poised to mount a recovery on shifting rate expectations.

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DAGELIJKSE MARKT ANALYSE 13 JANUARI 2015

• British Pound May Not Find Lasting Weakness in Soft UK Inflation Numbers
• Yen Falls as S&P 500 Futures Rise, NZ Dollar Declines on RBNZ Outlook

December’s UK CPI data headlines the economic calendar in European trading hours. Expectations call for the headline year-on-year inflation rate to edge downward to 0.7 percent, the lowest in over 12 years. A soft result may not yield significant downside pressure on the British Pound however.

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DAGELIJKSE MARKT ANALYSE 14 JANUARI 2015

• Euro Looks to ECJ OMT Ruling to Set Stage for On-Coming ECB QE Effort
• US Dollar May Fall as Yen Gains if Retail Sales Data Proves Disappointing

The Australian Dollar underperformed in overnight trade, falling as much as 1.2 percent against its leading counterparts. The move tracked sharp drop in copper prices, pointing to the implications of a darkening outlook for Australia’s pivotal mining sector and their ultimate impact on RBA policy as the drivers behind the selloff.

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DAGELIJKSE MARKT ANALYSE 15 JANUARI 2015

• Australian Dollar Soars as Firm Employment Data Trims RBA Rate Cut Bets
• Yen May Continue Lower After Overnight Slump on Firming Risk Sentiment
• US Dollar May Shrug Off Soft Headline PPI on Limited Fed Outlook Impact

The Australian Dollar outperformed in overnight trade, adding as much as 1 percent on average against its top counterparts, after December’s Employment figures topped economists’ forecasts (as expected). The report showed the economy added 37,400 jobs last month, topping calls for a 5,000 increase. The jobless rate fell to 6.1 percent, the lowest in four months. The Aussie’s advance tracked a jump in front-end bond yields, suggesting the upbeat data set poured cold water on the recent build in RBA interest rate cut speculation.

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DAGELIJKSE MARKT ANALYSE 16 JANUARI 2015

• FX Markets Set for Quiet Week-End as Traders Digest SNB’s Franc Shocker
• US Dollar Unlikely to Face Pronounced Selling Pressure on Soft CPI Result

A lackluster economic calendar in European trading hours is likely to fade from focus as battered traders digest the brutal volatility of the past 24 hours. The markets were understandably rattled after the Swiss National Bank unexpectedly scrapped its three-year-old Swiss Franc cap of 1.20 against the Euro, saying the “exceptional and temporary measure…is no longer justified.” EURCHF 24-hour realized volatility jumped to the highest level since at least 1971, swelling to nearly five times its previous peak (recorded in March 1995).

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DAGELIJKSE MARKT ANALYSE 19 JANUARI 2015

• Yen Gains on Haven Flows as Chinese Shares Slump on Lending Restrictions
• Swiss Franc Continues to Correct Lower After Last Week’s SNB-Driven Jump

The Japanese Yen outperformed in overnight trade, rising as much as 0.8 percent on average against its leading counterparts. A sharp selloff on Chinese stock exchanges appeared to fuel demand for the safety-linked currency. The Shanghai Composite equity benchmark index fell in excess of 6 percent – yielding the largest decline in five years – after regulators moved to restrict margin lending.

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DAGELIJKSE MARKT ANALYSE 20 JANUARI 2015

• US Dollar Outperforms on Firming Fed Policy Bets, Yen Falls on Risk Swell
• Euro May Overlook German ZEW as Traders Await ECB Meeting Outcome

The US Dollar outperformed in overnight trade, rising as much as 0.3 percent on average against its leading counterparts. The move tracked an advance in front-end Treasury bond yields, suggesting that firming Federal Reserve monetary policy expectations were behind the move.

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DAGELIJKSE MARKT ANALYSE 21 JANUARI 2015

• Bank of Japan Keeps Annual Monetary Base Growth Rate at ¥80T as Expected
• Yen higher After BOJ Announcement But Priced-in Policy Show Outlook Static

The Bank of Japan kept monetary policy unchanged by maintaining the annual pace of increase in the monetary base at ¥80 trillion, meeting economists’ expectations. Officials voted 8-1 to keep policy as is. The central bank sees long term inflation expectations rising and sees the economy recovering in the long term. The BOJ sees FY2015 core CPI at 1.0% and has stated that QQE will continue until a 2 percent inflation is achieved.

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DAGELIJKSE MARKT ANALYSE 22 JANUARI 2015

- European Central Bank (ECB) Widely Expected to Announce Quantitative Easing (QE) Program.
- Will ECB Share the Risk & Get Local Central Banks Involved?


Trading the News: European Central Bank (ECB) Interest Rate Decision
EUR/USD may face fresh monthly lows over the next 24-hours of trade as the European Central Bank (ECB) is widely expected to announce more non-standard measures to further mitigate the risk for deflation.

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DAGELIJKSE MARKT ANALYSE 23 JANUARI 2015

• Pound Looks to BOE Governor Carney Remarks for Updated Rates Outlook
• Euro Unlikely to Find a Potent Catalyst in January’s Round of PMI Readings

Scheduled commentary from BOE Governor Mark Carney headlines the economic calendar in European hours. The central bank chief is set to participate in a debate at the Davos Economic Forum. Traders will be most keen to hear any clues about the impact of yesterday’s ECB stimulus expansion on the BOE’s own policy direction. Sluggish growth on the Continent has exerted considerable pressure on BOE rate hike bets and traders will now want to hear if Mr Carney envisions the impact of ECB’s efforts as a possible driver for tightening sooner.

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DAGELIJKSE MARKT ANALYSE 26 JANUARI 2015

• Euro Shrugs Off Initial Selling Pressure Following Greece Election Outcome
• German IFO to Pass with Little Fanfare on Limited ECB Policy Implications

Aftershocks following the weekend’s Greek election defined price action in overnight trade. The outing produced a strong victory for the anti-austerity Syriza party, as amply telegraphed in polls ahead of the vote. While the victorious Alexis Tsipras and company appear to have fallen just shy of an outright majority in parliament, a preliminary coalition deal with the likewise euroskeptic ANEL party seems to be taking shape already.

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