Aug 28

Morning Call by Greg Secker

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The US dollar rose after the U.S. economy contracted by one percent in the second quarter showing signs of stabilization. However the dollar is weaker this morning. JPY/USD is up this morning currently at 93.83.The Japanese yen gained as falling U.S. stocks increased demand for currency safety. Euro/USD is down this morning at 1.4337 currently. The euro softened after European retail sales fell in August as rising unemployment curbed consumer spending. The Eurozone jobless rate rose to a 10-year high of 9.4 percent and may reach 11.5 percent in 2010. The economy is expected to return to growth in the middle of 2010 after contracting close to 4.6 percent this year. The British pound was knocked lower after both weaker than expected business investment and consumer spending provided evidence the UK is still in recession mode.  However Sterling has opened, up this morning and being pulled down bouncing around it’s open at 1.6279.The Canadian dollar is trading steady after giving back gains as crude oil and stocks fell. The Australian and New Zealand dollar fell for the third day against the US dollar on concerns of investment restrictions in China.

Due for release today there are the GBP GDP, GBP Private Consumption, GBP Government Spending, GBP Exports, Euro-zone Consumer Confidence, USD Personal Income, USD Michigan Confidence.

Aug 27

Greg Secker FX Update 27/08/09

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Today the Japanese Yen strengthened against majors, on speculations that China will cut its investment production, which aroused skeptics concerning economic recovery. After rising for three consecutive days, the U.S. dollar slightly changed today. The dollar index; a gauge of the dollar’s strength vis-à-vis six major currencies, is now at 78.62 from yesterday’s closing at 78.60. The euro-dollar is trading with a downside bias. Meanwhile, the euro is traded at 1.4245 recording a high of 1.4268 and low of 1.4217, where the pair is supported by 1.4235 and faces the coming resistance of 1.4255. Sterling is showing weakness. So far, the pound is trading at 1.6195 setting a high of 1.6249 and a low of 1.6179; while the coming support for the pair is seen at 1.6172 and the resistance is spotted at 1.6225. The dollar-yen pair is showing a downside tendency, reflecting the fears in markets, ahead of the release of important U.S. data later on today. Now, the pair is trading around 93.67, after hitting a high of 94.29 and a low of 93.36; while the pair is currently facing the coming support level at 93.50, while the resistance is spotted at 93.80.

 

Due for release today, according to Greg Secker, there are the USD Personal Consumption, USD Core Personal Consumption Expenditure, USD Gross Domestic Product Price, USD Initial Jobless Claims,  GBP GfK Consumer Confidence Survey, JPY Manufacturing PMI and JPY Jobless Rate.

Aug 26

Forex daily update by Greg Secker, Knowledge to Action

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Despite positive US data, the US dollar was mixed compared with most major currencies. The euro is modestly higher against the dollar, a rise in European equities increased risk appetite. Germany, also released data that was better than the previous quarter. The British pound fell against the dollar with uncertainty remaining in the economy. Bank of England policy makers said this month that the recession is deeper than anticipated. The Japanese yen was higher against the dollar, a fall in Asian equities increased demand for the safe-haven currency. The Canadian dollar declined against the dollar as crude oil prices fell. The Australian and New Zealand dollar had little change against the dollar as a fall in Asian equities damped demand for higher-yielding assets.

This morning, Gold is at 949.40 USD, Copper 288.80 USX and Brent Crude 71.94 USD. Lead prices rose to an 11-month high Yesterday – notes Greg Secker – as more Chinese smelters shut due to an industry-wide clampdown by Beijing following incidents of lead poisoning.

Due for release today, according to Greg Secker, there are the USD MBA Mortgage Applications, USD Durables Ex Transportation, USD New Home Sales, NZD Balance and NZD Trade Balance.

Aug 25

Morning Call by Greg Secker

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Yesterday – notes Greg Secker – , the FTSE 100 rose 45.34 points to close at 4896.23. Yesterday – notes Greg Secker – , London’s leading shares finished with comfortable gains, miners and banks showed strong rises. Yesterday – notes Greg Secker – , the Dow Jones industrial average rose 3.32 points to close at 9509.28. Yesterday – notes Greg Secker – , the Nasdaq Composite Index closed down 2.92 points to close at 2017.98. The S and P 500 index closed down 0.56 points to close at 1025.57. US stocks snapped their four-session winning streak on Monday after a warning over future bank losses saw the markets erase early gains.

 

Yesterday – notes Greg Secker – , debt markets were given a significant confidence boost when Santander (Spain’s largest bank) launched a program to buy back securitised bonds with a face value of €16.5bn ($23.6bn), says the FT. According to the Independent, car dealers were last night struggling to get paperwork to the US government after a late surge in sales under its car scrappage scheme. China’s Construction Bank has said that excess cash in the banking system has led to asset bubbles. This has caused concerns that lenders will rein in credit, which is helping undermine market confidence. Meanwhile a senior government economist Lu Zhongyuan, believes that Chinese investors are over-reacting to talk of monetary policy fine-tuning. He feels the recent slide in stocks will be short-lived.

 

Currencies that tend to be supported by rising commodity prices were broadly in favour, with the dollar and yen generally lower in an environment that mildly favoured risk. The dollar gained against most major currencies on Monday, recovering from recent declines, traders geared up ahead of key consumer and housing data later this week.  Yesterday – notes Greg Secker – , traders reacted to upbeat data from both sides of the Atlantic with reports showing a recovery in new industrial orders in the Eurozone in June and an improvement in US economic activity in July. Sterling came under pressure against the Euro, falling to a 11-week low on Monday, after strong Eurozone data compared with the view that the Bank of England may continue with its quantitative easing program and keep interest rates at a historical low for some time. EUR/USD has slipped a little this earlier morning, but is pulling back up to around the 1.4298 level. The JPY has seen across the board strength in overnight Asian trade, with a pick-up in caution evident. USD/JPY is down at 94.00, while EUR/JPY is down at 134.50 from around 135.10.

Aug 24

Morning Call by Greg Secker

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On Friday, the FTSE 100 closed at 4,850.89 up 2.9% for the week. On Friday, the Dow Jones industrial average 9,505.96 up 1.98% for the week. On Friday, the Nasdaq Composite Index closed at 2020.9 up 1.78% that week. The S and P 500 index closed last week up at 1026.13 up 2.20% that week.

 

Governments around the world are still sitting on multi-billion dollar losses from their direct shareholdings in banks, in spite of a strong rebound in equity markets in recent months. In contrast to Switzerland (which sold its 9 per cent UBS stake last week) the world’s other large economies – except the US – are sitting on combined losses of $10.8bn relating to their holdings in the equity of listed banks they bailed out over the past 12 months. In the UK, the Institute of Chartered Accountants in England and Wales reports that UK business confidence has turned positive for the first time in 2 years, with the business confidence monitor (BCM) showing a record rise to +4.8 from -28.2.  This is the biggest quarterly improvement since the monitor began in 2003. The FT reports that London’s Aim market might have recorded one of its worst performances in 2008, but it appeared to have had little damping effect on the pay packages for directors. Jean-Claude Trichet; president of the European Central Bank, has rounded on his US critics over charges that he has been too cautious in his handling of the economic and financial crisis in the Eurozone, reports the telegraph. They accused Mr Trichet and the ECB of waiting too long to cut interest rates and being more cautious than the Fed in the way they attempted to stimulate the Eurozone. Mr Trichet defended his position that the ECB was guided by its primary aim, which was to deliver stable prices and to revive bank lending.

 

EUR/USD and GBP/USD trading lower in early European trade at 1.4320 and 1.6464, respectively. The JPY has weakened overnight, USD/JPY up at 94.80 from around 94.30 on Friday, while EUR/JPY is up at 135.81 from around 135.07. The JPY weakness comes with general risk appetite in good shape at the start of the new week, hopes growing that the global economy is coming out of recession. Asian stocks have made gains overnight.

 

This morning, Gold is at, 954.60 USD, Copper 289.85 USX and Brent Crude 74.61 USD. Steadily rising commodity prices and improving economic confidence are supporting oil and gas stocks hammered by last autumn’s unprecedented downturn, writes the Independent. China July copper imports fell 23% and coal prices are at their highest in a year as a drop in Chinese mining output has forced the country to import.

 

Due for release today, according to Greg Secker, there are the GBP Nationwide House Prices, CAD Retail Sales, CAD Retail Sales Less Autos and USD Chicago Fed National Activity Index.

Aug 21

Morning Call by Greg Secker

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Yesterday – notes Greg Secker – , the FTSE 100 closed up by 66.91 points to close at 4,756.58. The index saw a broad based recovery, with miners, oils and financials showing strength. Yesterday – notes Greg Secker – , the Dow Jones industrial average gained 70.89 points (or 0.76%) to end at 9,350.05. Yesterday – notes Greg Secker – , the Nasdaq Composite Index climbed 19.98 points (or 1.01%) to close at 1,989.22. The S and P 500 index was up 10.91 points (or 1.09%) to finish at 1,007.37. US stock increased for the 3rd consecutive session, financial stocks showed gains after US manufacturing data and a rebound in Chinese stocks improved risk appetite.

In July the figures from the Office for National Statistics (ONS) showed that government net borrowing hit a record £8bn following a slump in tax receipts. Receipts are shrinking faster than the Treasury had predicted. Alistair Buchanan, chief executive of Ofgem, the energy regulator, has had a meeting with some of Britain’s largest energy companies after it emerged they were forcing as many as 250,000 small businesses to pay for their energy up to seven months in advance.  There is increased concern that this could put these companies into difficulties. Yesterday – notes Greg Secker – , the government cut the price of its £5bn credit insurance guarantee scheme to help protect suppliers from the collapse of their customers. The scheme lets suppliers buy six months of government-backed insurance to either restore cover to its original level or to double the amount they can obtain from the private sector. British businesses are more confident about their trading than they have been for 13 months, According the Lloyds TSB Corporate Markets Business Barometer, 30 per cent of businesses questioned in July expected their business activity to rise over the next year. The Council of Mortgage Lenders (CML) said yesterday, gross mortgage lending rose 26 per cent in July on the previous month but remains 36 per cent down on 2008. The Obama administration said yesterday, the US’s ‘cash for clunkers’ scheme will end on Monday. The government said the scheme was “an overwhelming success”, the program was called to a halt to make sure Congress does not exceed the allocated $3bn for the project. A stabilising US financial sector has allowed Barack Obama to trim 2009 budget deficit projections. Officials said, the White House budget office will lower its deficit forecast next week for the current fiscal year to $1.58 trillion (£95bn) from $1.84 trillion after removing $250bn set aside for bank bailouts. The Industrial and Commercial Bank of China (ICBC) (which is the world’s largest bank by market value), posted a 3 per cent rise in net profit in the first half from the last year.

Cable is firmer from earlier trade; presently up at 1.6491 but still currently below its open. Technical supports 1.6420, 1.6400 and 1.6375, resistances 1.6495/00 and 1.6515/25.EUR/USD has ticked higher in early trade, presently at 1.4250. The low so far has been 93.49 in USD/JPY and it is certainly unusual to say that USD/JPY is leading the way but that has been the case today. It is currently climbing back up to the 94.00 mark.

This morning, Gold is at, 941.00 USD, Copper 273.35 USX and Brent Crude 73.16 USD.

Due for release today, according to Greg Secker, there are the USD existing home sales and Eur-Zone Purchasing Managers Index.

Aug 20

Morning Call by Greg Secker

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Yesterday – notes Greg Secker – , the FTSE 100 closed up by 3.89 points (or 0.1%) points to close at 4,689.67. Oil producers were amongst the highest risers as there was increased demand from the US causing firmer crude prices. However, the banks fell, after HSBC traded ex-dividend.   Yesterday – notes Greg Secker – , the Dow Jones industrial average closed up 70.48 points at 9279.16. Yesterday – notes Greg Secker – , the Nasdaq Composite Index closed up at 1,969.24. The S and P 500 index was up 9.58 points to close up at 996.46. US stocks improved as investors reacted to firmer oil prices and investors started to shrug off overseas weakness. Healthcare stocks were among the better performers.

There has been concern among city economists about the weakness of the UK economy after it emerged that the Bank of England governor Mervyn King and two colleagues had pushed to extend quantitative easing (QE) by £75bn earlier this month, rather than the £50bn that was voted in. Detailed forecasts published by the BOE showed that gross domestic product (GDP) will rise by 0.2 per cent between July and September, marking the first economic expansion since the first three months of last year. These growth figures have been extrapolated by economists from data published by the Bank in the wake of last week’s Inflation Report. According the independent The Paris-based Organisation for Economic Co-operation and Development also said yesterday that the world’s 30 most advanced economies stopped contracting in the second quarter of the year, having endured the sharpest downturn since the Great Depression. According to research out yesterday by UBS, the devaluation of the Sterling has caused London to drop 19 places in a ranking of the world’s most expensive cities. London now ranks 21st for living costs and its international wage level comparison. Standard & Poor’s has reported that the number of companies defaulting on their debts has risen to record levels this year. 

Investment returns for risky corporate debt has rocketed since January. S&P said the amount of debt that has defaulted this year, already exceeds that of all the defaults in 2008. Research shows, that the world’s big investment institutions are dumping cash and bonds and scooping up equities. According to a poll, investor optimism about the global economy has risen to a six-year high and stock market sentiment is at its most bullish for two years. According to the Merrill Lynch fund manager’s survey for August, 75% of respondents believe the world economy will strengthen in the coming 12 months – the highest reading since November 2003. Hurricane Bill is the first of the 2009 Atlantic hurricane season and has already hit Category 4 status. Due to this Insurers are concerned they will have another season of billion pound losses. The Obama administration said it will wind down its popular “cash for clunkers” incentive program so as soon as early September. Yesterday – notes Greg Secker – , the Transportation Secretary Ray LaHood reassured auto dealers that they would be reimbursed for discounts given under the program.

Cable is ticking higher in early European trade, supported by a generally healthy risk appetite.  It is at 1.6575 at writing. Technical resistance now at 1.6590/00.  EUR/USD trading is off to a far slower start this morning, the pairing presently sitting at 1.4238. Asian stocks did ok overnight, Chinese stocks rebounding, and looks to increase risk appetite. The USD/JPY is up at 94.35 from a North American close Wednesday around 94.05, while EUR/JPY is up at 134.30 from around 133.80.

This morning, Gold is at, 946.30 USD, Copper 278.60 USX and Brent Crude 74.64 USD Yesterday – notes Greg Secker – Crude oil prices surged after the government’s weekly inventory report revealed a surprise decline in stockpiles. Gold demand fell to its lowest level in six years in the second quarter, the World Gold Council said yesterday, as the global downturn hit jewellery consumption and electronics producers’ buying demand. Demand worldwide fell nine per cent to it’s the lowest level since the first quarter of 2003. Just as the price of the commodity slides to a seven-year low, a hedge fund has made a large bet that natural gas prices will triple by winter.

Due for release today, according to Greg Secker, there are the GBP retail sales and CHF ZEW Survey.

Aug 19

Morning Call by Greg Secker

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Yesterday – notes Greg Secker – , the FTSE 100 closed 0.9% higher I closed 40.77 points higher at 4,685.78, this was led by gains from banks and miners which recovered from losses in the previous session. Yesterday – notes Greg Secker – , the Dow Jones industrial average was up 82.60 points (or 0.9%) at 9,217.94. Yesterday – notes Greg Secker – , the Nasdaq Composite Index was up 25.08 points (or 1.3%) at 1,955.92. The S and P 500 index was up 9.94 points or 1.01% at 989.67. Better than expected results from big retailers urged investors back into the market. European stocks inched up on Tuesday as the main indices covered lost ground during Monday’s session when markets hit a four-week low.

According to Knight Frank head Richard White, the property downturn has now reached the bottom. Tesco, the UK’s biggest retailer is continuing to lose market share. Tesco saw its market share of the grocery sector fall over the 12 weeks to August 9 as competition among the supermarkets intensified. Unexpectedly Inflation held steady in July. The CPI (consumer price index) was unchanged from June, keeping an annual rate of 1.8%. However many economists are still warning that deflation looms. Investor confidence in Germany, rose sharply this month as hopes grew that the economy will recover faster than expected. US producer prices fell by a larger-than-expected amount in July and notched up a record decline compared to a year earlier. The Labor Department said that the seasonally adjusted index for prices paid at the farm and factory gate dropped by 0.9%. The recovery has begun – although recovery will be unpredictable and protracted, according to the International Monetary Fund’s chief economist, writes the Telegraph. “The recovery has started,” claims Olivier Blanchard in a paper to be published by the IMF on Wednesday.  Corporate Bond issuance has risen to a record £1,103 billion in 2009, with four months of the year to go. Investors have moved their cash into corporate bonds because they offer higher returns than low interest rates on bank deposits and savings accounts. The telegraph reports that China and Australia have signed their biggest ever trade deal with PetroChina, they have agreed to buy A$50bn (£25bn) of natural gas produced by ExxonMobil.

Cable is down in early trade, presently at 1.6489. The move comes with risk aversion picking up as Chinese stocks again come under heavy pressure. This could have been affected by comments made by the next UK Prime Minister David Cameron that the British Government could default on it’s debts. EUR/USD has slipped back in early European trading, giving up some 25 points, presently at 1.4097.
This morning Gold is at, 939.00 USD, Copper 271.40 USX and Brent Crude 71.87 USD. There is fear is that fiscal stimuli flooding into the global economy will result in too much cash chasing too few grains and therefore causing higher prices. Sugar prices have been pushed to their highest level in three decades due to Global shortage, prices of soyabeans and corn have languished due to optimal summer growing conditions in the US Midwest.
Due for release today, according to Greg Secker, there are the GBP Bank of England Minutes, CAD Consumer Price Index, CAD Consumer Price Index, CAD Bank Canada Consumer Price Index and CAD Leading Indicators

Aug 18

Morning Call by Greg Secker

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Yesterday – notes Greg Secker – , the FTSE 100 fell 1.5% by the close yesterday, dropping 68.96 points to close at 4,645.01. Mining, oil and banking stocks lead the losers. Falling metals prices due to worry over the economy particularly added to the poor results of the mining sector. Yesterday – notes Greg Secker – , the Dow Jones industrial average fell 186.06 points or 2% to end at 9,135.34. Yesterday – notes Greg Secker – , the Nasdaq Composite Index lost 54.68 points (or 2.75%), to close at 1,930.84. The S and P 500 index slid by 24.36 points (or 2.43%) to close at 979.73. The US stocks had their worst loss in 7 weeks yesterday as weak data from Japan and a weak data from Lowe’s dampened hopes about the economies growth. Japan’s GDP pulled out of recession in the 2nd quarter, but it was at a slower rate than expected. Lowe’s stock dropped 10.3% . The Shanghai Composite index, China’s most-watched benchmark, fell 5.8 per cent to 2,871 on Monday, a drop of more than 17 per cent

Investments in the private equity sector plummeted by 80% in the first half of the year, compared to the same period the year before. International Financial Services London have underscored the ongoing lack of debt as causing this restrictive effect on the equity sector. Micheal Page recruitment company has reported a 50% drop in profits for the first half of the year, but also stated that the jobs market in the UK was showing signs of stabilization. The number of new jobs in the city dropped by 7% month-on-month in July, but is still at its second highest level this year, according to Morgan McKinley’s employment monitor. Japan became the latest major economy to emerge from recession yesterday, after 4 consecutive months of contraction its GDP grew 0.9% for the April-June quarter. This has also come of the back of news from Germany, France and Hong Kong showing signs of growth. The US Federal Reserve said yesterday it was extending to mid-2010 the Term Asset Backed Securities Loan Facility aimed at boosting lending in the ailing commercial real estate market. China on Monday signaled a softer stance in its protracted iron ore negotiations with global miners, when it announced a face-saving deal with Australian miner Fortescue Metal. China has been forced to modify its demands in the face of a sharp rise in spot ore prices. Chinese commodity imports are expected to slow in the second half of the year from record levels as the impact of the country’s stimulus package, arbitraging opportunities and stock-piling fade, according to a Royal Bank of Scotland report being published Monday.

Yesterday – notes Greg Secker – , the Sterling fell against the dollar while the price of oil dropped, causing some analysts to call an end to the rally. Cable has pulled up this morning, presently up at 1.6406.  Technical resistances now lie up at 1.6420 and 1.6450/60. While EUR/JPY is up at 134.43. EUR/USD has jumped higher in early European trade, presently at 1.4129.  The move comes with Asian stocks settling down after yesterday’s steep losses.

Oil prices fell on Monday while base metals moved lower and sugar prices slipped as a correction across commodity markets went into a second week. Gold fell 1.5 per cent to $932 a troy ounce, under pressure from the strength of the dollar. Copper dropped 3.1 per cent to $6,050 a tonne after hitting $6,460 on Friday, a high for 2009.

Due for release today, according to Greg Secker, there are the GBP Consumer Price Index, GBP Core Consumer Price Index, Eur German ZEW Survey, Euro-Zone ZEW Survey and USD Producer Price Index, USD Producer Price Index.

Aug 14

Morning Call by Greg Secker

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Yesterday – notes Greg Secker – , the FTSE 100 rose by 38.7 points (0.8%) to 4,755.46 to a 10-month closing high. All miners showed increases. Among the largest movers were Antofagasta, Eurasian, Natural Resources, Kazakhyms and Xstrata, which gained between 4.6 and 6 %.Yesterday – notes Greg Secker – , the Dow Jones industrial average rose 36.58 points (0.39%) to 9,3978.19.
Yesterday – notes Greg Secker – , the S&P 500 index rose 6.92 points (or 0.69%) to close at 1,012.73.Yesterday – notes Greg Secker – , the Nasdaq Composite Index added 10.63 points (or 0.53%) to close at 2,009.35. Meanwhile, equity futures indicate: Dow futures are higher by 85 points to 9,404, while S&P futures are up 9.5 points at 1,012.US stocks rose as better-than expected shares in Walmart helped off-set disappointing government numbers in on retail sales and jobs. However results from the rest of the retail sector were varied. Asian Stocks also rose , driving the MSCI Asia Pacific Index to the highest level since September, this was based on speculation that improving corporate earnings will extend a 5-month rally in equities.
 

Sales at US retailers unexpectedly fell in July and the number of workers filing new claims for jobless benefits rose last week. Commerce Department yesterday showed that total retail sales edged down -0.1% compare to market forecasts expecting a 0.7% rise. Analyst expected the ‘cash for clunkers’ program would have improved retail sales. The Labor department also showed first time applications for unemployment benefits rose by 4,000 to 558,000 last week. Yesterday – notes Greg Secker – , surprisingly France and Germany made a return to growth. Figures from the Eurostat showed that both economies grew by 0.3% in the three months to June on the previous quarter, the increased output was boosted by consumer spending – in particular the success of car scrappage schemes. European stock markets closed higher yesterday, helped by this growth data.
 

Asda attracted more than 18m customers a week for the first time in its 44-year history, but falling food inflation pegged back its recent powerful sales growth. The Wal-Mart-owned grocer posted underlying sales, excluding fuel, up by 7.2% in the three months to 30 June, down from 8.4% in the previous quarter, the Independent reports. RWE which is Europe’s fifth largest utility, yesterday met forecasts with a 3.8% rise in first half operating profit, as lucrative power sales made up for weak performance at it’s subsidiary NPower.
EUR/USD having opened a little lower today, currently down at around 1.4267. For today, technical resistances are up at 1.4300/05. Cable has opened slightly lower, currently lower at around the 1.6557 mark. JPY/USD is currently down at 95.31, while EUR/JPY is down at 135.93 having opened at 136.16.
 

Due for release today, according to Greg Secker, there are a variety of releases, Euro-Zone Consumer Price Index, USD Consumer Price Index , USD Consumer Price Index ex Food and USD industrial production.

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