Yesterday – notes Greg Secker – the FTSE closed down 29 points at 4,387 with resistance gained at 4,400 and support from the 20ema. The price gapped down 60 points at the open at 08:00, and is still sandwiched between the support and resistance levels mentioned last week. The Dow closed up 103 points at 8,403 and is still sandwiched between support at 8.240 and resistance at 8,600. The S&P and Nasdaq are also still ranging sideways. FX news: Figures from the UK’s Nationwide HPI m/m, which measures the change in the selling price of homes with mortgages backed by the Nationwide, came in at 7:00 this morning: the average cost of property increased by 1.2% in May, expected at -0.9% and previously -0.4%. House prices rose sharply in May offering evidence of activity in the UK housing market. Other high news today includes USD Prelim GDP q/q, currently expected to be revised upwards to – 5.5%, after the initial Advance GDP was set at -6.1%.
The London markets managed to inch forward on Wednesday, having flitted in and out of red and green today the FTSE 100 finally finished the day four points up at 4416. Hotel group InterContinental Hotels (IHG) and hedge fund manager Man Group (EMG) leading the day’s climbers – the latter ahead of its full-year results tomorrow. Miners were among the day’s biggest strugglers, with Lonmin (LMI) and Fresnillo (FRES) leading the fallers. On Wall Street the Dow closed down 2% at 8,300, a fall of 173 points. At 02:30 am, Australia’s Private Capital Expenditure (which shows the change in the total inflation-adjusted value of new capital expenditures made by private businesses) came in at -8.9%, forecast at -6.0%. Australian business investment fell for the first time in six quarters, adding to signs that the economy has sunk into its first recession since 1991. This was followed by New Zealand’s Annual Budget Release at 3:00. Swiss Trade Balance numbers came in at 7:15 this morning, forecast at 0.11 billion, with the actual better than expected at 2.56 billion. In Europe, German Unemployment Change comes out at 8:55, forecast at 66K, up from the previous 58K, a key figure for Europe. At 11:00, British CBI Realized Sales is a major figure for the Pound, expected to turn negative, from 3 to -10. Stateside, at 13:30, we have Core Durable Goods Orders m/m, predicted to drop by 0.4%, less than last month’s fall. The non-Core figure including transportation items is expected to rise by 0.1%. Also at 13:30, the US Unemployment Claims figures are published, expected at 628K from the previous 631K. At 15:00, New Home Sales are released, expected to rise to 363K, from 356K last month. At 23:45, New Zealand Building Consents m/m figures are published. At 12:01 am, UK GfK Consumer Confidence is due. Expectations are for an easing from -27 to -25. From 12:15 am we see a raft of figures from Japan. These include Household Spending which is predicted to fall by 0.7%, Tokyo Core CPI, expected at -0.6% from 0.0% last month, the Japanese Unemployment Rate, expected at 5%, from 4.8%, and Prelim Industrial Production m/m, expected at 3.3%, previously 1.6%. At 7:00 am tomorrow morning, the GBP Nationwide HPI m/m figure is released, expected at -0.9%, from -0.4%.
Yesterday – notes Greg Secker – the FTSE closed up 46 points at 4,411. During the morning session the index fell heavily, and then rallied for the final 2 hours following the higher than expected consumer confidence figures. The Dow closed up 196 points at 8,437 following a rise in USD consumer confidence, expected at 42.7, with the actual number at 54.9. During the early hours of the morning, Japan’s trade balance figures showed that Japan’s exports fell at a slower pace in April, adding signs that the country’s worst recession since World War II may be easing, while New Zealand’s NBNZ Business Confidence survey suggested that confidence is slowly rising. The most significant news out today is USD existing home sales at 3pm, annualised figures of residential buildings sold during the previous month, excluding new construction. This is expected at 4.65M, previously 4.57M. In the early hours of Thursday morning, we see Australia’s private capital expenditure q/q, previously 6.0%, expected at -5.5%, and New Zealand’s budget release at 3:00am.
There was no trading yesterday because of the Bank Holiday. The FTSE, writes Greg, 100 closed on Friday up just 19 points at 4,365 with a high of the day just below the significant number of 4,400. There is still a lot of indecision in the market. The support level at 4,315 is still holding and it will be interesting to see whether the price action breaks up through the resistance or down through the support. With a Bank Holiday Monday in the US we have no new movement on the Dow Jones. Stock markets have been choppy over the past two weeks with gains that are then eradicated in end-of-week trading. Economic news last week – S&P downgrading the UK economy and raising questions about US debts – had the market reconsider gains made over the past few months. Key figures to watch out for in the US this week will be April home sales and the latest assessment of consumer confidence. Markets are also nervous about a possible bankruptcy reorganization filing for General Motors Corp on June 1st. Too early for clear direction yet. In Forex news we see the release of several figures released today. This includes: GfK German Consumer Climate which was released at 7:00, remaining the same at 2.5 points, and German Final GDP, also at 7:00 this morning, which remained unchanged at -3.8%. At 7:45 we have French Consumer Spending, previously 1.1% and forecast at -0.4 %, and at 9:00 we see the European Current Account, predicted to show a smaller deficit of – 7.5 billion, from -8.1 billion. At 10:00 we have European Industrial New Orders, predicted to turn positive, from -0.6 % to 1%. In the US, at 15:00 we have CB Consumer Confidence, predicted to rise from 39.2 to 42.7. This is the first significant figure for the dollar this week. At 12:50 am, we have two important releases from Japan: Monetary Policy Meeting Minutes and Trade Balance.
Yesterday – notes Greg Secker – the FTSE closed down 122 points at 4,345 after heavy falls during the whole day. In the US the Dow Jones fell 129.91, or 1.5 percent, to 8,292.13. In earlier trading it fell as much as 201 points recovering a little as the trading day closed. The Stock markets are jittery particularly after the S&P downgrading of the UK economy as indicated by the VIX Index (a measure of stock market volatility and “fear†in the market) which jumped up 8%. Yesterday – notes Greg Secker – , Sterling dropped from a 6-1/2-month high against the dollar after the ratings agency revised its outlook on Britain to negative from stable, saying the country’s debt burden would rise significantly. This reminded markets that the global economy still faces challenging times despite recent signs that the worst of the crisis may be past. That sentiment boosted safe-haven demand for the dollar and weighed on riskier assets such as equities and commodities. GBPUSD did recover the upside during the American session, consolidating near day’s highs. UK retail sales rose for a second month in April by more than economists forecast, evidence that the recession’s grip on the economy may be loosening. Sales climbed 0.9 percent from March, according to the Office for National Statistics with economists predicting a 0.5 percent increase. Sales rose 2.6 percent from a year earlier. US Unemployment Claims came in slightly higher than expected at 631K (expected at 630K). Overnight we had news from the Bank of Japan, which raised its view of the economy for the first time in almost three years on signs that a record contraction in the first quarter represented the worst of the recession. The BOJ kept the benchmark overnight lending rate at 0.1 percent in a unanimous vote. At 9:30 today we see the UK’s revised GDP for the first quarter, which is expected to remain unchanged. The forecasted figure is -1.9%, showing that the British economy has shrunk during the first quarter. GDP, which measures the change in the value of all goods and services produced by the economy, is the broadest measure of economic activity and primary gauge of the economy’s health. We also have Canadian Core Retail Sales m/m at 13:30 today, expected to decline from 0.6% previously, forecast at -0.2%. At 19:00, Fed Chairman Ben Bernanke speaks.
Yesterday – notes Greg Secker – the FTSE closed down 13 points at 4,468. This 0.3% fall apposes the gains in the other major European exchanges where the Paris CAC gained 0.8%, and the Frankfurt DAX gained 1.6%. The mining sector lead the gains on the FTSE whereas the banks fell away slightly. FX news: Yesterday – notes Greg Secker – we saw that the Canadian consumer prices fall more than expected in April to 0.4% on an annualized basis from 1.2 per cent in March, the lowest in fourteen years. A 2.5% decline in energy costs led to a 0.1% drop of inflation during the month of April. The Pound’s bullish sentiment was bolstered by the BoE minutes which showed the central bank was unanimous in keeping rates on hold at 0.50% and expanding their quantitative easing efforts. Today, Switzerland, France and Germany countries are on holiday. Key news includes British Retail Sales out at 9:30, predicted to rise by 0.5% from 0.3% (indicating the change in the total value of inflation-adjusted sales at retail). At 13:30 we have US Unemployment Claims, expected to drop from 637K to 630K. Yesterday – notes Greg Secker – the Dow Jones fell 52 points, or 0.6% to 8,422. The Standard & Poor’s 500 index fell by 0.5%, to 903 and the Nasdaq fell just 6 points, or 0.4%, to 1,727. US Bank stocks led the fall after the Fed announced that unemployment in the US could reach 9.6%.
Yesterday – notes Greg Secker – the FTSE closed up 35 points at 4,482, closing above the 200ema. This may be significant after the 130 move to the upside yesterday and is the second consecutive green bar. Yesterday – notes Greg Secker – ’s 0.8% rise has seen the index open and close above the 200ema. Yesterday – notes Greg Secker – the Dow Jones Industrial average fell 29 points or 0.3 percent to close at 8,474. At 9:30 today we see the release of the minutes from the Bank of England’s May 7 meeting. The growth and inflation outlook published in the BOE’s Quarterly Inflation Report suggests that the central bank may be open to expanding its quantitative easing programme. If the minutes from the BOE’s most recent meeting reiterate this, the British pound could pull back sharply. For those trading the USD CAD Income Generator, at midday Canada’s month on month CPI figures are released, expected to rise by 0.2%, unchanged from last month. Core CPI month on month (ex volatile items) is predicted to move from 0.3% to 0.1%. Expectations are for almost unchanged prices. This means that should there be a surprise, USD CAD could shake on this inflation figure. Also worth noting that the price of oil has risen recently and Canada, being an exporter of oil, is highly affected by the price of oil and also by the Crude Oil Inventories that are published in the US today at 15:30. Also Stateside, Geithner speaks at 14.30 while the FOMC Meeting Minutes are released at 19:00 delivering in-depth insight into the economic conditions that influenced the Federal Reserve’s vote regarding where to set interest rates.
Yesterday – notes Greg Secker – the FTSE rallied 98 points to close at 4,446 breaking up through the key level of 4,400 which has provided support and resistance over the last 2 weeks. Bullish sentiment continues to drive the FTSE 100 2.2% higher as all the other major global indices closed up around 2%. Forex news – significant news for today includes the UK’s consumer price index (CPI) reading for the month of April which is expected to rise 0.4 percent, the third straight increase. However, the annual rate of growth, which is more closely watched by the Bank of England, is forecasted to fall to a more than one-year low of 2.4 percent from 2.9 percent. If CPI falls more than projected, the British pound could pull back sharply as the markets will anticipate that the BOE will expand their quantitative easing efforts even further. On the other hand, if CPI holds strong, the currency could rally in response. At 10:00 we see the German ZEW Economic Sentiment figures, previously 13.0 and expected to rise to 20.0, with above 0.0 indicating optimism and below indicating pessimism. This is a leading indicator of economic health and could potentially affect the Euro. At 13:30 we see USD Building Permits, an excellent gauge of future construction activity, previously at 0.52m and forecast at 0.53m. At 12:50 am, Japanese Prelim GDP is predicted to show a fall of 4.2% in the first quarter. The Japanese economy has shown very fast contraction during this crisis. The Dow Jones industrial average rose 235 points yesterday to 8,504 (3% increase), closing most of last week’s losses.
On Friday the FTSE closed at 4,348 ending a mixed week down 87 points. In the early part of the week the index gained support from 4,400 but this proved to act as resistance on Friday. On Friday the Dow Jones industrial average fell 62 points or 0.8 percent, to 8,268 – falling 3.6% for the week. The S&P 500 index fell just 10 points or 1.1 percent, to 882.88, and the Nasdaq composite index fell 9 points or 0.5 percent, to 1,680. In Forex the British pound ended last week down against the US dollar and Japanese yen, but up versus the rest of the majors. The GBP/USD pair remained contained within the same rising channel it has traded within for nearly a month, despite the still bleak fundamental outlook for the UK, and is continuing to trade above the 1.5000 level. Friday news from the US showed that the Consumer Price Index remained stable in April according to the Labor Department. That was in line with economist expectations but higher than the 0.1% decrease seen in March. The Core CPI, which excludes volatile items such as food and energy, rose 0.3% in April, maintaining the steady pace of growth seen over the last few months. News highlights for the week ahead include GDP figures in the US and Japan, CPI in the UK and Canada, US Building Permits and Unemployment Claims, meeting minutes from both the Federal Reserve (FOMC Meeting Minutes) and the Bank of England (MPC Meeting Minutes) and Retail Sales figures from both the UK and Canada. The week wraps up with Fed Chairman Bernanke due to deliver opening remarks at the College Law School Commencement in Boston. High news today includes Reserve Bank of Australia Governor Stevens speaking at 23:10, which could move that currency. Today there is a Bank Holiday in Canada.
Yesterday – notes Greg Secker – the FTSE closed up 30 points with support being gained from 4,300. The index closed at 4,362 and made an attempt to regain the losses from Wednesday. It will be interesting to see what the index does today, the last day of the week. The Dow Jones industrial average ended yesterday up 46 points, but lagged gains by the S&P 500 index and Nasdaq composite index. Stocks rose on Thursday after three mostly down days as traders bought beaten-down financial and technology stocks. Buying was subdued after a worse-than-expected weekly unemployment report added to concerns that the economic recovery might not come as quickly as hoped. The market is down sharply this week as investors worry that the optimism that sparked a huge rally might have been premature. The S&P 500 index is still 32 percent above the 12-year low it hit in early March. In Forex-related news yesterday US Unemployment Claims came in worse than expected as did NZ Retail Sales m/m. We have a number of data releases due today; EUR Flash GDP q/q, US Core CPI m/m and, most importantly US TIC Long-Term Purchases which measures the level of net investment in US Government securities and therefore has an impact on the USD.
