The markets sold the dollar and bought oil on Friday in a month-end move that ripped into the market as the European session closed. Equity trade did not back things, and that creates a question mark in regard to it's sustainability. The move is about as parabolic as it gets, and is highly unlikely to hold for too long. However to reverse it will need lower equities, and oil markets to back off 68.50. The IMF seemed to spark things with a call that questioned bond values, and tied in with a U.S. GDP release that was not as poor as expected.
The market reacted, but the lack of equity follow-through now leaves a huge question as to how this can hold. The administration will be delighted with the weaker dollar, the overseas central banks however will be less than happy with such a severe move. The dollar index hit 78.00, a 12 month low area, and a price point that previously has been very well protected by the international markets.
Dollar Swing Point: Short-dollar trends on the majors, but dramatically Oversold dollar reads, and way outside the daily trading ranges. These pairs will reverse the moment equity markets drop lower. Equities have not backed these moves at all, and that is a red flag.
Dollar Drivers. Long Trends, Long Momentum: Red Flag. The global dollar drivers are in neutral momentum reads, and outside of oil and gold, have not shown anything that suggests they will be backing the market holding these extended looking dollar index reads.
Trader membership information
For a forex proprietary news feed for your site, contact us.
Written by TheLFB Trade Team, © 2007-2009 LFB Services, LLC. All rights reserved.
TheLFB Risk Disclaimer
Saturday, August 1, 2009
Covering the widespread Canadian industrial market, Manufacturing Automation keeps readers informed of the latest advanced manufacturing technologies,
Manufacturing Automation's mission is to make their readers' jobs easier through information about the latest industrial automation technologies, trends, news and products. MA is dedicated to providing relevant Canadian content that informs, educates, inspires and keeps readers knowledgeable and up-to-date so they can remain competitive in a challenging marketplace.
Geographic Eligibility: Canada
Geographic Eligibility: Canada
"Organizational Agility: How Business Can Survive and Thrive in Turbulent Times"
Learn why 81 percent of executives view approaches such as knowledge management and collaboration as the main drivers for increased productivity, enhanced performance and rapid innovation.
In today's knowledge age, the ability to turn information into insight in response to market movements is core to sustainability. This report conducted by the Economist Intelligence Unit examines the challenges and rewards of organizational agility, particularly in tough economic times. More than 300 executives around the world were surveyed on the benefits, challenges and risks associated with creating a more agile organization
In today's knowledge age, the ability to turn information into insight in response to market movements is core to sustainability. This report conducted by the Economist Intelligence Unit examines the challenges and rewards of organizational agility, particularly in tough economic times. More than 300 executives around the world were surveyed on the benefits, challenges and risks associated with creating a more agile organization
"10 Really Good Reasons To Use Predictive Analytics"
Here are 10 really good reasons predictive analytics can help your business.
Predictive analytics is a powerful tool that helps organizations solve key challenges by using business knowledge to drive efficiencies and strengthen their competitive advantage. Read this best practices paper and you'll discover ten ways predictive analytics will make it easier for your organization to:
Gain a more complete view of your business
Find hidden value in your data
Build stronger customer relationships
Reduce your exposure to risk and fraud
And much, much more...
Predictive analytics is a powerful tool that helps organizations solve key challenges by using business knowledge to drive efficiencies and strengthen their competitive advantage. Read this best practices paper and you'll discover ten ways predictive analytics will make it easier for your organization to:
Gain a more complete view of your business
Find hidden value in your data
Build stronger customer relationships
Reduce your exposure to risk and fraud
And much, much more...
ECB: What is Next?
Despite the unstable economic environment, the worst might be over in the United States and in Europe. As a result, rates should remain on hold for some time and then climb again along with the economic expansion. The U.S. dollar is moving away from the lows of the past days, but the medium term trend remains bearish for now.
Advertisement
U.S.: The economic picture improving The economic picture is improving in the United States, as both housing and consumes appear to be designing a bottom at current levels. With about half USD 300 billion of long Treasuries and USD 1.45 trillion of Agency debt still to be bought out, the Federal Reserve will keep rates steady for now. However, rates should then rise, once the economy growth will become more incisive. During his testimony on Capitol Hill, Mr. Bernanke anticipated an increase in unemployment and announced that the Fed is holding less U.S. Treasures than before the financial crisis started. In effect, the job market remains weak, although the pace of decline is slowing. In May, non-farm payroll slid by 345,000 (-500,000 expected) versus April’s fall of 504,000 and March’s -652,000. The decline was broad-based with the auto industry registering about 20% of the losses. The unemployment rate is now 9.4% from 8.9% in April. Personal income increased 0.5% month on month in April, while personal spending declined 0.1%. On a yearly basis, personal income is up 0.7% and personal spending is down 1.5%.
Advertisement
U.S.: The economic picture improving The economic picture is improving in the United States, as both housing and consumes appear to be designing a bottom at current levels. With about half USD 300 billion of long Treasuries and USD 1.45 trillion of Agency debt still to be bought out, the Federal Reserve will keep rates steady for now. However, rates should then rise, once the economy growth will become more incisive. During his testimony on Capitol Hill, Mr. Bernanke anticipated an increase in unemployment and announced that the Fed is holding less U.S. Treasures than before the financial crisis started. In effect, the job market remains weak, although the pace of decline is slowing. In May, non-farm payroll slid by 345,000 (-500,000 expected) versus April’s fall of 504,000 and March’s -652,000. The decline was broad-based with the auto industry registering about 20% of the losses. The unemployment rate is now 9.4% from 8.9% in April. Personal income increased 0.5% month on month in April, while personal spending declined 0.1%. On a yearly basis, personal income is up 0.7% and personal spending is down 1.5%.
Focus on the Fed Decision of Next Week
Global markets are waiting for the Federal Reserve meeting of next week. Rates should remain on hold for the coming months and eventually rise along with the economic growth. In the mean time, the U.S. dollar’s rebound might continue over the short term.
Advertisement
Awaiting for the Fed’s meetingThe state of the U.S. economy is slowing improving, as the all the twelve Federal Reserve District Banks indicated in the periodic “Beige Book” report that growth remains subdued, albeit the decline appears to be moderating. Consumers are still cautious about what item to buy, but home sales are increasing and prices should again rise in the coming months. In effect, in May, retail sales climbed by 0.5%, after having declined 0.2% in April. Sales of autos and parts showed a 0.5% increase for the first time since January. However, on a yearly basis, retail sales are still down 11.1% from 9.2% in April. The job market is weak, although the pace of decline is slowing. Initial jobless touched the lowest level since January. They fell to 601,000 for the week ending June 6th from 625,000 registered the previous week.
Advertisement
Awaiting for the Fed’s meetingThe state of the U.S. economy is slowing improving, as the all the twelve Federal Reserve District Banks indicated in the periodic “Beige Book” report that growth remains subdued, albeit the decline appears to be moderating. Consumers are still cautious about what item to buy, but home sales are increasing and prices should again rise in the coming months. In effect, in May, retail sales climbed by 0.5%, after having declined 0.2% in April. Sales of autos and parts showed a 0.5% increase for the first time since January. However, on a yearly basis, retail sales are still down 11.1% from 9.2% in April. The job market is weak, although the pace of decline is slowing. Initial jobless touched the lowest level since January. They fell to 601,000 for the week ending June 6th from 625,000 registered the previous week.
Fed’s Decision On Target
The U.S. dollar is still moving laterally against major currencies and a strong breakout from current levels would possibly mark the trend for the next months. Rates should remain unchanged in the U.S., but quantitative easing is still in the cards.
Advertisement
U.S.: quantitative easing will be implemented?The U.S. dollar is still looking for the line of least resistance, albeit important support levels against the Euro and the British Pound will be met this week. In reality, a strong breakout from current prices would possibly mark the trend for the next months, while the Federal Reserve is meeting this week in Washington D.C. Rates should remain very accommodative, CPI core rates printed 1.8% in May from 1.9% in April, but quantitative easing remains a possibility. In effect, after having bottomed at the beginning of 2009, interest rates yields have increased consistently. The short/medium term trend is bullish over the medium/long term. In fact, the financial markets might already anticipate the next scenario which will be characterized by higher raw material prices. In May, the Conference Board’s Index, which forecasts the possible performance of the U.S. economy over 3/6 months period, increased 1.2 % (1.0% expected) month-on-month from April’s 1.1%.
Advertisement
U.S.: quantitative easing will be implemented?The U.S. dollar is still looking for the line of least resistance, albeit important support levels against the Euro and the British Pound will be met this week. In reality, a strong breakout from current prices would possibly mark the trend for the next months, while the Federal Reserve is meeting this week in Washington D.C. Rates should remain very accommodative, CPI core rates printed 1.8% in May from 1.9% in April, but quantitative easing remains a possibility. In effect, after having bottomed at the beginning of 2009, interest rates yields have increased consistently. The short/medium term trend is bullish over the medium/long term. In fact, the financial markets might already anticipate the next scenario which will be characterized by higher raw material prices. In May, the Conference Board’s Index, which forecasts the possible performance of the U.S. economy over 3/6 months period, increased 1.2 % (1.0% expected) month-on-month from April’s 1.1%.
Subscribe to:
Posts (Atom)
