Daily May 6, 2011.pub

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Daily May 6, 2011.pub

Publié le : jeudi 21 juillet 2011
Lecture(s) : 144
Nombre de pages : 3
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GLOBALFXSTRATEGYCamillaSutton,CFA,CMTEricTheoretDailyForeignExchangeUpdateChiefCurrencyStrategistCurrencyStrategist(416)8665470(416)8637030Monday,May9,2011Camilla_Sutton@scotiacapital.comEric_Theoret@scotiacapital.com
MARKETOPENSRETRACINGSOMEOFLASTWEEKLOSSESGERMANEXPORTSARESTRONGSOOTHINGFEARSCADisrecoveringsomelostgroundonstrongercommoditiesandaweakerUSD;Friday’semploymentreleaseshouldsoothsomefears.EURfearsoverGreekexitdonotcometofruition,soothingfears.EUR ‐ahealthycorrectionlastweek;butfundamentalsarenotbroken.Germanyreportedstrongexportsdata;thisweek’sfocusisCPIandGDP.JPYdovishBoJminutesandriskappetiteweighingonyentoday.CNYexportdatatobereleasedintomorrow’sAsiansessionandtheUSChinaSEDcouldprovidesomemarketvolatility.Thisweek’sfocuswillbeFedspeak,USinflationandtradingpatterns.FXMarketUpdateMarketsarestabilizingfollowinglastweek’sbroadbasedselloffinrisk.Commoditiesarestronger,equitiesarepointingtoapositiveopenandtheUSDisgenerallyweaker.Incurrencies,theNordicsarethestrongestperformersagainsttheUSDasweapproachtheNorthAmericanopen,followedbyAUD,EUR,CHF,CADandNZD.GBPisflatonaweakenedeconomicoutlookandJPYisweakerasaresultofdovishBoJminutes.TheStrategicEconomicDialogue(SED)betweenChinaandtheUSwillbeanimWHOISMOSTEXPOSEDTOPIGDEBTportantmarketeventthisweek,givenongoingfrictionoverthepaceoftheEURBnCNY’sappreciation.China’stradebalance,tobereleasedintheAsiansession,isanothereagerlyawaiteddatarelease.E.T.WhatchangedforEURlastweek:Extendedpositioninghasbeenshakenoutofthemarket.TheECBhassignaledthatitisunlikelytoincreaseinterestratesinJune,buthasleftthedooropentoasummerhike.IndiaandMalaysiahavebothincreasedinterestrates,fightinginflationheadon,butpotentiallyweighingongrowth.ThepatternofUSeconomicdataisincreasinglyunevenagainof244kjobsonnonfarm,butanincreaseintheunemploymentrateto9.0%;softnessintheISMnonmanufacturingcomposite,butongoingstrengthinthemanufacturingindex.Source:BIS,ECB,TheEconomist,ScotiaFXStrategyWhatdidnotchangeforEURlastweekalot:Asiancentralbanksaretighteninginterestrates,whichmightinducesomemoderationingrowthandinflation,butshouldlaythefoundationECBSMPPURCHASESAPPEARTOHAVESTOPPEDformediumtermfinancialstability.TheECBremainsinatighteningcycle.Withinflationarypressuresbuilding,itwilllikelyhikeinterestratesseveraltimesthisyear.TheFedseesheadlinepressuresastransitory,isfacingunemploymentlevelsof9%,anunevenpatternofgrowthandownsover20%oftheUSTreasurymarket.InterestratespreadsarelikelytomovefurtheragainsttheUSDthisyear.TheUScontinuestostrugglewithprovidingacrediblefiscalplan.ThereareongoingproblemsinEurope,butauthoritieshavedisplayedanunprecedentedcommitmenttosupportingtheperipherycountries.NoneofthislaysoutanenvironmentwherethevaluationoftheUSDshouldrisematerially.WeholdayearendEURforecastof1.50.C.S.AmericasUSDCAD(0.9645)CADhasgained0.3%sinceFriday’scloseandisamidperformer.Overthelastthreesessions,CADhasheldinreasonablywell,WehavelaunchedadailyEmergingAsianFXstrategypublication.Ifyouareinterestedinbeingaddedtothisdistributionlist,pleaseemailSacha_tihanyi@scotiacapital.com
GLOBALFXSTRATEGYlosingjust0.4%againsttheUSD,whiletheEURisdown3.0%.Today,therecoveryincommoditiesissupportingCAD,combinedwithagenerallyweakerUSD.Thereislimiteddataallweek,withjustbuildingpermitsontaptoday.However,Friday’semploymentwasencouragingandshouldmarketsstabilizefurtherfromhere,USDCADislikelytotestbacktowards0.95.Weexpecttoday’srangetofallbetween0.9574and0.9670.C.S.EuropeEURUSD(1.4405)Afterdroppingalmost600pointsinthelasttwotradingsessionsoftheweekandclosingonitslow,EURappearstobestabilizingaswemoveintotheNorthAmericansession.Thelast200pointdropcamelateFridayasmarketrumoursswirledthatGreecewasplanninganexitfromthemonetaryunion.Thetradingpatternlastweekhighlightshownervousthemarkethasbecomeandleavesthecurrencyvulnerable.Howeverasthefirstsectionnotes,wedonotbelievethatthefundamentalshaveshiftedenoughtoreversethetrendinEURandthatrecentpriceactionhasbeenahealthycorrectioninstead.Today’sGermanexportdatawasnotablystrong,jumping7.3%m/m,whichshouldsoothsomeoftheconcernsthataroselastweekafteramiserablyweakfactoryorders.EURsupportliesatFriday’slowof1.4311andresistanceliesatthepsychological1.45.C.S.ProblemsinGreeceItislikelythatGreecewillfacefundingissuesinlate2012andthatsomeformofrestructuringwilloccursometimebetweennowandthen.ThepoliticsofaGreekrestructuringarelikelydifficult,andthereislimitedappetiteforanenhancedbailoutpackage.Howeverasthemiddlechartonpage1suggests,thebailoutpackageislikelymorepalatablethanasignificantrestructuring.Greekyieldsareofftheirhighs,butthe2yearspreadbetweenGreekandGermanyisstillelevatedat22%.Intermsofexposures,itistheECBwhoisthemostvulnerableholdinganestimated€125bninGreekdebt,whileforeigninvestorsown€100bn,domesticbankshold€60bnandforeignbanksown€53bn(ofthisGermanyowns€20andFrance€15bn).C.S.KePricin&Levels 30Day1Day%1Week100Day200DayPi vot1stPivot1stSpot HistVol Chg%MA SupportResistanceChg MA USDCAD 6.80.96370.331.330.98001.00200.95730.9702 EURUSD 11.71.43880.582.911.38681.36151.42701.4547 GBPUSD 7.31.63680.101.631.60791.59131.63191.6440 USDCHF 9.10.87620.331.240.92800.96180.86930.8815 USDJPY 9.280.760.190.5682.3882.9680.2381.11 AUDUSD 11.51.07570.551.691.02170.98951.06231.0847 USDMXN 7.311.610.230.7311.9812.2711.5411.71 DXYUSDindex 8.174.590.362.3277.0578.4474.0475.03 CRBCommodity337.351.098.96345.76N/A317.09 N/A Gold1,505.600.682.561,416.371,365.641,480.931,520.48 WTCrude(Nymex)100.453.1411.7197.7789.0895.93103.68 NatGasN mex4.260.509.314.234.134.204.33 BoCNoonRate0.9617 CAD(closefromBloombergnotBoC):0.9666 PricingSource:Bloomberggainlargest loss5/9/2011
Today'sReleases&Speakers TimeCountry ReleasePeriod ConsLast(EST) 08:15 CAHousingStarts APR183.0K 188.8K 21:30 AUTrade500MBalance MAR205M 21:30 AUNABBusinessConfidence APR‐ ‐9 22:00 CHTradeBalance$3.20B $0.14B(USD) APR 22:00 CHExportsYoY% APR29.5% 35.8% 22:00 CHImportsYoY% APR28.9% 27.3% 00:00 USU.S.ChinaStrategicandEconomicDialogue 05:30 AUAustraliaFederalBudget SuggestedReadingA‘Buy’SignforTreasurys?M.Gongloff,WSJ(May9,2011)ThePoliticalCausesofaNotSoSecretMeeting,W.Munchau,FT(May9,2011)EuroNationsDividedOverGreekDebt,M.Walker,WSJ(May9,2011)NowObamaMustLeadontheDeficit,C.Crook,FT(May9,2011)U.S.WillUrgeChinatoBoostInterestRatesasTalksStart,R.Christie,BBG(May9,2011)WhattodoWithaRecalcitrantDollar,E.Chancellor,FT(May9,2011)2
Significance
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Monday,May09,2011AlackofactivityintheECB’sSecuritiesMarketProgram(SMP)hasleftmarketparticipantswonderingwhattoexpectfromthecentralbankasitrelatestoEurozonegovernmentbondpurchases.TheSMPwasestablishedinMay2010to‘ensuredepthandliquidity’indysfunctionalmarkets.However,thelastweeklypurchasemadeundertheSMPoccurredonMarch25,asseeninthechartonpage1,despiterisingbondyieldsintheEurozoneperiphery.ThiswashighlightedintheQ&AportionoftheECBconferenceonMay5,withtheaudiencememberremarkingthatrecentsterilizationeffortshadnotbeensufficienttocovertheentireSMPportfolio.GiventheuncertaintyofSMPlossesarisingfromaGreekrestructuringandECBmembers’aversiontodebtmonetization,theprogramislikelyviewedlessfavourablybythecentralbankthanitwas,whichmightexplainthelackofuse.Todayat9:30amETtheECBwillannouncethemostrecentroundofactivity.E.T.GBPUSD(1.6380)GBPisupslightly,thoughtrailingmanyofitspeersamidanticipationofareducedgrowthforecastfromtheBoE,tobereleasedinWednesday’squarterlyInflationReport.Thereportisexpectedtostrikeadovishtoneasgovernmentspendingcutscontinuetobeaheadwindintheeconomicrecovery.GBP’sfallfromneartermhighsseeninlateAprilhasbeensteadyandalmostunbroken.Supportliesat1.63givenrecentcongestion;thiswasalsoanareaofresistanceinlate2010.E.T.Asia/OceaniaUSDJPY(80.75)JPYisweak,down0.2%andlaggingallofthemajorsasweapproachtheNorthAmericanopenfollowingthereleaseoftheBoJminutesfromtheirAprilmeeting.TheminuteshighlightedanincreasinglydovishstanceonthepartofcentralbankofficialsastheyassessedtheneedtoprovidesupporttotheJapaneseeconomy.USDJPYfellmostoflastweekonthebackofabroadbasedselloffinrisk.Thereturnofriskappetitehelpedprovideaneartermfloorof80andreducedtherumoursoverinterventiontoweakenJPYthathadbeenswirling.E.T.
GLOBALFXSTRATEGY
3
Monday,May09,2011
OurMayFXstrategyconferencecallisnowavailable.Pleasefeelfreetoaccessitatyourconvenience:Dial:9056949451(localtoToronto)Passcode:52500061#Thismonth's20minutecallishostedbyCamillaSuttonanddiscusses:OverviewofScotia'sFXForecastThemarketissearchingforaUSDbottomwhatcomesnextUSDCADoutlookfromhereThepresentationisattachedbutcanalsobefoundat:http://www.scotiafx.com/conference/index.htm
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