EURUSD showing the effects of headline risk

Written February 9, 2012 at 9:10 AM EST by  

The EURUSD has been spiking up and down over the last hour of trading (see chart above) as headlines from Greece (austerity deal reached) and comments from Draghi has the market traders on edge. This is not unusual.  Event risk is high. Market risk is always presents and Liquidity risk is also high as traders play it safe.  The Midpoint of the days trading range today comes in at 1.32625. The 200 bar MA is 1.3266.  The bias is a touch more bullish as  prices are up on the day.   On the hourly chart the price consolidation is currently within a neutral area between 1.3284 and 1.3248. A move outside the will have traders looking for momentum in the direction of the break (see chart above).

On the daily chart, keep the 1.3332 level in mind. This is the 100 day MA. The price has not been above this MA since the end of October 2011.  On the downside a close below the 1.3242 level (38.2% of the move down from the August high would not be a welcome sign for the bulls.

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Portugal says 3rd review of Troika loan program to start Feb 15th

Written February 9, 2012 at 8:58 AM EST by  

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Draghi sees tentative signs of stabilization; Inflation broadly balanced

Written February 9, 2012 at 8:35 AM EST by  

  • Economy faces downside risks
  • Non standard measures are temporary
  • Real GDP growth likely very weak in 4th Quarter
  • Stress in fin mkts has diminished as a result of steps taken by ECB
  • Low rates support Euro economy
  • No longer sees substantial downside risk.
  • Price pressures should be limited due to weak Euro growth
  • Inflation risk broadly balanced
  • Impact of LTRO on bank funding is still unfolding
  • Fiscal discipline, structural reforms essential
  • All countries must stick to fiscal targets
  • Declines to comment on how Greek holdings to be treated
  • ECB will take more risk in regard to collateral
  • ECB did not discuss a change in rates today
  • Level of LTRO should be similar to the 1st (to take place Feb 29th)

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Initial Claims better than expected.ECB Draghi awaited

Written February 9, 2012 at 8:33 AM EST by  

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Canadian New Housing Price Index, USDCAD at .9952

Written February 9, 2012 at 8:31 AM EST by  

New Housing Price Index (MoM)

  • Survey: 0.2%, Actual: 0.1% ,Prior: 0.3%

New Housing Price Index (YoY)

  • Survey: 2.5%, Actual: 2.5%,Prior: 2.5

 

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US Jobless Claims Move Lower to 358K

Written February 9, 2012 at 8:30 AM EST by  

Jobless Claims:  Survey:  370K    Actual: 358K   Prior: 367K    Revised:  373K   

Continuing Claims:  Survey: 3500K    Actual:  3515K    Prior: 3437K   Revised: 3451K

EUR/USD continues to move higher on Greek austerity deal news.

Bobbys Corner-Open Market-Feb.9.2012

Written February 9, 2012 at 8:24 AM EST by  

Good Morning:

The ECB left interest rates unchanged at 1%-which was highly expected by market participants.
The BOE also left interest rates unchanged at .5%-and will increase their QE asset purchases.

The European Troika gave Greece an additional 15 days to find 300 million euros of pension cuts.  This seems to be a major stumbling block, and the process will be stalled until this issue is taken care of.

The ECB left interest rates unchanged-as the ECB is taking a “wait and see” approach to the Greek bailout deal.
Greek leaders could not come up with a full austerity plan-and the Greek Finance Minister is on his way to Brussels.  He was expected in Brussels to meet with EU leaders with a completed plan-he now goes to plead his countries case-Again-to EU leaders.

Gold, Silver and gold are all higher.

Asian equity markets were lower-Europe is flat-US Futures are higher.

HAVE A GREAT DAY & GOOD LUCK

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BOE adds 50 Billion QE. ECB keeps rates unchanged. Draghi awaited

Written February 9, 2012 at 8:14 AM EST by  

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FT Breaking News: Greek Politicians Have Reached Austerity Deal

Written February 9, 2012 at 8:12 AM EST by  

Statement expected shortly. Government source corroborated FT report.

Greek political leaders agree on austerity measures with EU/IMF lenders according to a government source.

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Greek Party officials have reached an austerity deal

Written February 9, 2012 at 8:12 AM EST by  

According to headline in the FT. No other details cited

The EURUSD has moved higher on the news.

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Overnight review

Written February 9, 2012 at 8:11 AM EST by  

In the UK, the BOE added 50 billion GBP of QE (they call it the Asset Purchase Facility) to a total of 325 Billion. The purchases will take another 3 months. They cited slightly weaker economy in the 4th quarter and slowing inflation which should cause inflation to undershoot the 2% in the medium term.  The GBPUSD has moved higher and the EURGBP lower as traders buy GBP on the decision.  The GBPUSD is at the highs for the day  and has retraced 61.8% of the decline from yesterday’s trade. The EURGBP moves toward the 100 and 200 hour MA at 0.8326 (see chart above). This will be a key level for traders today. In other UK data released today, Indust. Prod (+0.5% vs +0.2% exp) and Man. Prod. (+1% vs +0.2% exp) came in better than expected.  The UK Trade deficit also showed improvement. The ECB kept rates unchanged at their meeting today. ECB Draghi speaks at 8:30 AM.  There still is  no Greek deals overnight.  A Euro official said overnight that Greece has until Sunday to find 300 million of cuts for 2012.   In a continuation of the absurd, Greek PM Papademos has insisted on revising budget targets for 2014. He informed European negotiator only today. As a result, debt sustainability
reports from Troika have to be revised.  It was also announced that the once 50B from public assets has been
toned down to 19 billion. It is hard to sell assets in a country that is falling apart.  Greek unemployment rose
to 20.9% from 18.2% in October. Industrial Production fell by -11.3% in December vs -7.8% in November.  Today the Initial Claims will be released at 8:30 with 370 exp vs 367k last week.  Wholesale inventories will be released at 10 AM ET with estimates of 0.4% vs 0.1% last month. In Canada New Housing Price index is due at 8:30 wit expectations of 0.2% vs 0.3%.  The market will be interested in hearing what Draghi has to say at  his press conference at 8:30 AM.  WIth inflation expected to fall in coming months as data drops out of the calculation, will he signal additional easing down the road. This will make the cheap money give
away at the end of February (LTRO tranche) even cheaper. .

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ECB Leaves Benchmark Interest Rate Unchanged at 1.00%

Written February 9, 2012 at 8:00 AM EST by  

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Canada Housing Price Index & US Jobless Claims Data at 8:30AM

Written February 9, 2012 at 7:42 AM EST by  

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