As mentioned in the previous post, the Yen index can give us an excellent perspective of market sentiment, given the Yen’s unique position within the forex market as both a currency of safe haven and a gauge of market risk.
Futures Rise After Australian Employment, ECB Report U.S. equity futures traded slightly higher in early pre-market trade following stronger than expected Australian employment data and also dovish comments from the ECB in its Monthly Bulletin. The ECB sees the eurozone economy stabilizing in 2013 with growth returning this year and sees inflation remaining tepid with downside risks remaining.
U.S. stock indexes printed small gains yesterday as market participants begin to focus on the two day Federal Reserve meeting. Analysts are looking for policymakers to provide further monetary stimulus – QE4? However, the Fed watchers will also be watching for any signs of deal or lack of deal concerning the fiscal cliff.
Welcome to Wednesday’s Morning Coffee Break – U.S. markets start the third session of the week after two straight days of uneven trading. One positive take away from yesterday’s session was the break in the final hour sell off that has persists the last few weeks.
Asian markets begin the week off with a big bang Monday morning – Sunday evening in the U.S after the European Finance Ministers approved to provide Spain euros for a banking bailout.
The US Dollar (ticker: USDOLLAR) traded lower against the Australian Dollar and other high-risk counterparts on a modest improvement in financial market sentiment, but overall momentum left it poised for modest gains against the Euro and British Pound. It was a quiet start to the trading week as highly-anticipated events over the weekend failed to produce material breakthroughs or shifts in financial market sentiment.
Any way you cut it, the dollar’s recent performance is impressive. So far this month, the Dow Jones FXCM Dollar Index (ticker = USDollar) has climbed 1.9 percent to its highest weekly close since the middle of December. Looking at currency’s performance in specific corners of the market, we find the EURUSD is below 1.3000, AUDUSD is at its lowest level this year and the greenback has even been able to muscle gold (another safe haven) into a potentially critical reversal of a trend that goes back over three years.
– Market optimism fades and suggests more USD strength – Widespread calls for a break lower in Eur/Usd – Key economic data and political risk ahead – Focus for now on monthly US employment data Although we have seen no clear breakouts in most of the major currencies, and although the Euro still remains locked in a very well defined 1.3000-1.3500 consolidation (that has defined trade for much of 2012),
– RBA shocks markets and cuts by 50bps to 3.75% – Decision surprising given RBA track record – Aussie sold aggressively across the board in response – UK manufacturing PMIs disappoint; weighs on Pound
Index Last High Low Daily Change (%) Daily Range (% of ATR) DJ-FXCM Dollar Index 9830.8 9844.1 9816.27 0.07 55.72% The Dow Jones-FXCM U.S. Dollar Index (Ticker: USDollar) is 0.07 percent higher from the open after being oversold on Friday, and the greenback should continue to retrace the decline from earlier this month as we expect the Federal Reserve to conclude its easing cycle this year. However, the technical outlook
