Forex Blog by Greg Secker

The FTSE 100 closed 93.2 points up at 4189.6, held higher by a positive open on Wall Street. 
Banks helped push the FTSE 100 index firmly into the black yesterday as airlines hit by swine flu fears regained some of their losses. Part-nationalised Royal Bank of Scotland and Lloyds Banking Group drew positive comments from HSBC brokers, while British Airways was up almost 4% after falling for two days.  RBS was the leading blue-chip stock, up more than 12%, closely followed by Lloyds.
Stateside, the Fed confirmed that the recession is starting to ease.  At the end of a two-day meeting yesterday, Federal Reserve policymakers said that while the economy is still receding, the pace of decline “appears to be somewhat slower” than the last time they met in mid-March.
Major indices, which had already been up sharply ahead of the announcement, posted gains of more than 2 percent.  The Dow Jones industrial average jumped 169 points to its highest close since 9 February.  The Dow is now 25 percent above its early March lows, though stocks have been unsteady over the past several days on fears of a potential swine flu pandemic and persistent concerns about the country’s biggest banks. In Forex news today:  At 1:30pm CAD GDP m/m and USD Unemployment Rate.  Expected to be slightly better, watch out for volatility if the results are worse or much better.

The FTSE closed down 70 points yesterday at 4,096. During the first hour of trading yesterday the index lost more than 55 points before ranging sideways for the rest of the morning and into the early afternoon. A good rally started in the early afternoon before falling again to close just below the big number of 4,100. The mining sector took the largest hits as short-term confidence took a slide.
Stateside, the Dow Jones industrial average slipped 8.05, or 0.1 percent, to 8,016.95 after being down as much as 86 ahead of the consumer confidence report, while broader stock indicators also lost ground. The S&P 500 fell 2.35, or 0.3 percent, to 866.16, and the Nasdaq composite index fell 5.60, or 0.3 percent, to 1,673.81.
A closely watched measure of consumer confidence soared in April, coming in at 39.2 rather than the expected 29.6, pulling stocks off an early slide as investors grew hopeful that a better outlook among spenders would translate into bigger cash register receipts.
Stocks ended with modest losses after fluctuating throughout the day. Worries that large banks might need more capital and the spread of swine flu were balanced by news that the Conference Board’s Consumer Confidence Index surged this month to its highest level since November.
On the Forex front, the Dollar and Yen eased slightly yesterday as risk aversion eased, lifting high yielding currencies, such as the Aussie. There is also some caution ahead of US GDP data due later today and any further news from the Federal Reserve on a possible extension of quantitative easing, and for its assessments for any early signs of recovery.  In data releases today at 1.30pm, USD Advance GDP q/q is due, then at 7.15pm the FOMC statement is expected to keep official cash rates steady at 0.25%. Later in the day, at 10.00pm, NZD Official Cash Rates are expected to be reduced by 0.5% to 2.50%. At 11.45pm NZD Building Consents m/m are due.

In FTSE news, London trading stocks traded mixed after Spain reported its first case of swine flu virus. Traders worried that if the spread of the influenza is not checked soon, the global trade and economies around world may shrink. The FTSE, writes Greg, 100 index closed up 11.02 or 0.27% to 4,167.01 with pharmaceutical stocks rising and transportation stocks falling. Aviva Plc increased 5% after it reported 25% increase in its capital surplus on a bond offering and reinsuring life insurance policies.
The Dow Jones industrial average gave up a midday recovery and retreated about 0.6 percent on Monday as the swine flu’s death count in Mexico grew to about 150 people from 100.  The Dow fell 51.29, or 0.6 percent, to 8,025.00, its first drop in three days. Wall Street decided to hedge its bets as the U.S. cases of swine flu doubled to about 40.Airline and other travel-related stocks suffered the sharpest losses Monday.  Monday’s pullback came on very light volume — a sign that there was more profit-taking than fear in the selling. The Dow’s losses were mitigated by General Motors Corp., which said it will cut 21,000 jobs by next year and ask the government to exchange GM debt for stock.  The bailed-out automaker’s announcement did not erase the possibility of a GM bankruptcy, but made it appear a bit less likely. Broader stock indicators also closed lower. The Standard & Poor’s 500 index fell 8.72, or 1 percent, to 857.51, and the Nasdaq composite index fell 14.88, or 0.9 percent, to 1,679.41.
In Forex, the dollar and the yen rallied yesterday on rising risk aversion as concerns grew that the swine flu in Mexico could spread and become a pandemic. The euro fell against the dollar erasing most of Friday’s gains. The flight to safety puts pressure on currencies seen as higher risk such as the Australian and New Zealand. In data releases today at 11.00am GBP CBI Realized sales are due. Then at 3.00pm USD CB Consumer Confidence is due. Later at 4.00pm for the CHF, SNB Chairman Roth Speaks.

The FTSE 100 closed up 127 points on Friday after a rally on Wall Street.  The index pushed significantly higher than Thursday’s highs as the banking sector did well.  Barclays was up 4.5 per cent, Lloyds was up 3.9 percent and HSBC went up 2.1 per cent.  The index eventually closed at 4155, giving strong bullish signals as the price barged through the long term trend line. In Wall Street on Friday Investors set aside some of their worries about banks and the economy, The Dow ended its seventh straight “up” week Friday with a gain. Also on Friday the Federal Reserve report was light on details, but didn’t bring any bad news. Investors were also pleased about quarterly results from Ford Motor Co., American Express Co. and Microsoft Corp. The Dow Jones industrial average rose 119 or 1.5 percent, to 8,076. In Forex the Euro rose against the USD on Friday as improved business sentiment in Germany fuelled hopes the euro-zone may already have seen the worst of the recession.  The dollar also came under pressure due to increased risk appetite following the rising stock market. There are no major data releases due today, but several over the next few days.

The FTSE 100 was up five points in early trading to 4,035.79 by 09:00 GMT as investors digested yesterday’s Budget. Retail stocks led the rally, with Next up 8.01 per cent and Marks & Spencer up 6.61 per cent. Fund management Schroders saw a fall of 3.24, after reporting a 54 per cent fall in first quarter profits. Yesterday – notes Greg Secker – ’s Budget targeted the top income earners and featured help for pensioners, making it a mixed bag for the stock market. Pension providers were affected by the changes as many fear high earners may take their cash elsewhere, while a gloomy economic forecast for the year signaled the recession is far from over.  The FTSE 100 was up five points in early trading to 4,035.79 by 09:00 GMT as investors digested yesterday’s Budget. Retail stocks led the rally, with Next up 8.01 per cent and Marks & Spencer up 6.61 per cent. Fund management Schroders saw a fall of 3.24, after reporting a 54 per cent fall in first quarter profits. Yesterday – notes Greg Secker – ’s Budget targeted the top income earners and featured help for pensioners, making it a mixed bag for the stock market. Pension providers were affected by the changes as many fear high earners may take their cash elsewhere, while a gloomy economic forecast for the year signaled the recession is far from over.  Forex:  The EURUSD had a significant bullish correction yesterday. The pair broke above key resistance level 1.3100, topped at 1.3159 and closed at 1.3143. Technically the pair would test another resistance around 1.3210 or even 1.3309 area in nearest term but medium bias remains unclear. Failure to stay above 1.3100 today should take us back to bearish outlook towards 1.2900 – 1.2850 area.
High news today, GBP retail sales and Prelim GDP are both expected to be better than previously forecast.  At 1:30pm USD core durable goods orders also expected to improve.

The FTSE 100 responded uneasily to the Budget, rising 43 points back over the 4,000 mark. The UK’s top share index dropped immediately after the Budget, which contained some gloomy predictions for the economy.  But the market rallied by the end of the afternoon, closing 1.08 per cent up at 4,030.66, the FTSE 100 was lifted by banking and retail stocks.
From the US, volatile financial stocks steered the market for the third day in a row after Morgan Stanley and Capital One Financial Corp. posted lackluster quarterly reports, with investors worried about rising levels of souring debt on bank balance sheets.
A late-session drop in banks left Wall Street’s major benchmarks mixed. The Dow Jones industrial average fell 83 points or 1 per cent, to 7886.57, while the technology-heavy Nasdaq composite index ended modestly higher rising 2.27 or 0.1 per cent, to 1646.12, ahead of a quarterly report from eBay Inc. 
In forex news, the euro continued its rise against the dollar yesterday while sterling fell sharply as the UK government issued grim forecasts in its annual budget. The yen rose to a three-week high against the dollar. In data releases today at 9:00am for the CHF, Gov Board Member Hilderbrand speaks and then at 10:00am GBP CBI Industrial Order Expectations are due.  At 12.30pm, CAD Core Retail Sales m/m are due with the expectation of a slight reduction.  Also at 12.30pm, USD Unemployment claims are due, followed by Existing Home Sales at 2.00pm. At 2.30pm, the CAD BOC Monetary Policy Report is released with Gov Carney speaking at 3.15pm.

The FTSE pushed down during the day yesterday but ended the session near enough where it opened. Closing down 3.4 points at 3987, it seems the index is awaiting the budget announcement due at 12.30 today. Lloyds, RBS and Aviva where among the indexes worst performers for the day all losing between 6 and 9 per cent each as investors sold the stock in large quantities. Yesterday – notes Greg Secker – the Dow Jones industrial average jumped 128 points or 1.6 percent to 7,969 after tumbling 290 points Monday on worries about bad debt at banks and the implications of the stress tests. Stocks fluctuated in the early session after a string of lackluster earnings reports and forecasts fuelled worries about how quickly the economy can recover. Bank stocks, which led the market lower on Monday, bounced back after the US Treasury Secretary asserted that “the vast majority” of banks have enough capital. JPMorgan Chase rose 9 percent and Citigroup jumped 10 percent. The fortunes of bank shares have largely dictated the stock market’s direction since the fall of Lehman Brothers in mid-September, and investors took these comments as a reason to go back into the market. Some analysts attributed the buying to short covering, where investors have to buy stock after having earlier sold borrowed shares in a bet that the market would fall. There is significant Forex news from the UK today so FX traders should steer away from trading sterling. At 9.30am we see the GBP Claimant Count Change which reflects change in the number of people claiming unemployment-related benefits during the previous month.  This number is expected to be down, from 138,000 previously to the forecast 118,000.  Also at 9.30am, the MPC Meeting Minutes are released providing a detailed report of the Bank of England MPC’s most recent meeting and important economic insights.  At 12.30pm, we see the UK’s Annual Budget release from the Treasury.  At 2.00pm, Treasury Sec Geithner speaks about the ongoing efforts to address the global recession at the Economic Club, in Washington DC. With regards to GBP/USD, better than expected CPI data gave the pound a temporary boost yesterday.

The FTSE closed down 102 points yesterday as the bad news regarding the Bank of America caused a large amount of selling worldwide. The 50ema provided support and the closed was 10 points under the significant number of 4,000. Today there are fresh concerns about the banking sector, and currently there are a large amount of first Quarter earnings being released so it’s likely that the markets will remain volatile for the short-term. In New York, the benchmark Dow Jones closed down 289.60 points after falling 200 points on the open finally finishing at 7.841.73, while the broader S&P 500 fell 4.3pc – the US indices worst day since March 5. The Chicago Board Options Exchange Volatility index – known as the “Vix” – which measures the volatility of the S&P500, rose by 15.1pc, its biggest one day gain since January 20. In FX related news yesterday we had AUD PPI q/q significantly lower than forcast at -0.4%.  Being a heavy news week this week we have important GBP CPI and RPI y/y figures being released today – both expected to decline. We also have the release of the German  ZEW Economic Sentiment which is expected to increase sharply from -3.5 to +1.8; important as a figure above zero is considered optimistic. The ZEW is a  leading indicator of economic health as investors and analysts are well informed due to their occaption, and changes in their sentiment can be an early signal of future economic activity.

The FTSE 100 broke it’s long term trend line closing up on Friday at 4092, and could be heading for a test of 4300.  The move up was ignited by the banks as Citigroup announced positive earnings.  Among the biggest gainers were Lloyds rising 16.6% followed by RBS rising 14.3%. Wall Street found enough in the latest earnings reports on Friday to keep its six-week rally alive. Stocks ended yet another week with a modest advance as earnings from Citigroup Inc and General Electric Co came in ahead of the market’s deficient expectations. Stocks fluctuated much of the day to end with slight gains. The Dow Jones industrial average rose 5.9, or 0.1 per cent, to 8,131.33. The Standard & Poor’s 500 index added 4.3, or 0.5 per cent, to 869.6, while the Nasdaq composite index rose 2.63, or 0.2 per cent, to 1,673.07. In Forex, the US dollar rose to a one month high against the euro on Friday after comments by the European Central Bank chief failed to allay uncertainty about the banks future policy direction. The dollar was also boosted by a slight rise in risk aversion despite better than expected earnings from Citigroup and General Electric and investors reassessed the sustainability of the recent upbeat results.  In data releases overnight saw the AUD PPI q/q released with a slightly worse result than expected. No other major data releases due today.

The FTSE 100 enjoyed a strong day, boosted by good performances in the industrial metals and life insurance sectors. The blue chip index was up 84 points to 4052, with insurer Prudential climbing over 8% to 394.12p to stand at the top of the winners’ board. Bank were also strong with banks Barclays and Lloyds Banking Group, gaining over 7% and 6% respectively. It was a dire day for outsourcing group Bunzl, which saw shares slide just shy of 10% on the back of big falls in underlying sales for the first quarter. Also suffering was credit-checking group Experian which fell over 5% despite expecting to deliver full-year profits. The Dow Jones industrial average, DJI rose 95 points to 8,125. US Stocks surged on Thursday as expectations of reassuring results from bellwethers, including Google, lifted technology shares, while JPMorgan’s better-than-expected profit added to bank stabilization hopes. People are starting to feel that maybe there’s a slight chance this is not just a bear market rally,” said John O’Brien, senior vice president at MKM Partners LLC in Cleveland, referring to the market’s 28 percent rebound since the 12-year closing low of March 9. In Forex news on Thursday the dollar and the yen rallied against the euro on further bleak data around the world dented optimism about the global economic recovery , boosting safe haven flows into the U.S. and Japanese  currencies. U.S. data released, points to continued weakness in the housing and labour added to the gloom. In data releases today at 8.00am for CHF, the SNB Chairman Roth Speaks.  Then at 1100am the CAD CPI m/m is due. Later in afternoon at 4.30am US Fed Chairman Bernanke Speaks.