Portfolio Performance : +5.75%
Actions : Long USD/CAD at 1.01845
Headline News
1. Germany sees 2009 federal budget deficit 10.5 billion euros vs 11.9 billion in 2008
2. Israel approves prisoner swap with Hezbollah, reopens crossing for goods to Gaza
3. WSJ highlighes Taiwan as investment opportunity
4. Japanese PM Fukuda approval rating higher by 2 points to 26 percent
5. Domestic exporters buying AUD/USD
6. Indonesian President Susilo Bambang Yudhoyono popularity ratings have fallen because of the recent fuel price increase
7. Singapore May commercial bank loans S$256.91 billion vs S$203.80 billion
8. Singapore M3 S$323.81 billion versus S$296.95 billion a year ago
9. Malaysia may tweak its budget deficit for 2008
10. South Korea industrial production down 0.6 percent from April
11. Japan May housing starts lower by 6.5% from a year earlier
12. Japan May orders received by 50 largest contractors down 25.2% year on year
13. German May wholesale down by 0.8% year on year
14. FT says that cracks are appearing in Chinese discretionary spending
15. UK May mortgage approvals hit new record low of 42 000 vs April 58 000, lowest since March 2001
16. Euro Zone Provisional HICP higher by 4.0% versus 3.7% in May
17. Philippines sees inflation above 11% in June
18. Malaysia Broad Money supply higher by 12.4% year on year
19. Thai Inflation could top 10% in July
20. Chicago Purchasing index 49.6 versus 49.1 in May
My expectation for the USD crosses
1. AUD : Negative
2. GBP : Positive
3. CAD : Negative
4. JPY : Positive
5. CHF : Positive
6. EUR : Positive
Bottomline : I think that the overall environment is still nervous and a lot of people are not optimistic over the USD, I am long CAD at this point
Tuesday, July 01, 2008
Thursday, June 26, 2008
Portfolio Performance : +5.73%
Actions performed : I did some intraday trades, trading the GBP/USD pair
Headline News
1. The FOMC statement was very discouraging for the USD bulls
2. UK Prime Minister Gordon Brown says that law reform needed to get nuclear stations to be built quickly to reduce the country's dependance on oil and to combat climate change
3. Foreign investors were net buyers of Japanese stocks for the sixth straight week
4. The Taiwan Ministry of Economic Affairs plans to propose a rise in the cap of Taiwanese corporates in China by the end of July
5. Singapore May factory output down by 12.8% versus average forecast growth of 1.6%
6. German import prices higher by 2.4% year on year in April
7. French June consumer confidence -45 versus -41 in May
8. Foreign investors net sellers of 4.02 billion Taiwan shares
9. Germany might introduce a EUR 5 billion tax break for commuters to shield consumers from rising petrol prices.
10. OPEC believes that it will need to produce far less oil over the next 12 years than the US has suggested, saying that new supply from regions and biofuels would reduce the need for its oil
11. Dutch consumer confidence falls to -19 from -17 in May
12. Euro Zone May M3 higher by 10.5%, unchanged from April
13. Euro May Loans higher by 10.4% versus 10.6 percent in April
14. Hong Kong Exports higher by 10.3% year on year versus 14.5% in April
15. Taiwan Central Bank will do it can to fight inflation
16. OPEC President sees $150 - $170 per barrel oil in summer
17. US jobless claims unchanged from previous week
18. US Q1 GDP Final came in at 1% as expected
19. US Conference Board Help Wanted Ad index 17 versus 18 in April
20. US May existing homes sales higher by 2% Month on Month
My expectation for the USD cross
1. CAD : Negative
2. JPY : Positive
3. CHF : Positive
4. EUR : Negative
5. AUD : Neutral
6. GBP : Neutral
Bottomline : I expect market volatility to continue, and that the USD might succumb to further weakness
Actions performed : I did some intraday trades, trading the GBP/USD pair
Headline News
1. The FOMC statement was very discouraging for the USD bulls
2. UK Prime Minister Gordon Brown says that law reform needed to get nuclear stations to be built quickly to reduce the country's dependance on oil and to combat climate change
3. Foreign investors were net buyers of Japanese stocks for the sixth straight week
4. The Taiwan Ministry of Economic Affairs plans to propose a rise in the cap of Taiwanese corporates in China by the end of July
5. Singapore May factory output down by 12.8% versus average forecast growth of 1.6%
6. German import prices higher by 2.4% year on year in April
7. French June consumer confidence -45 versus -41 in May
8. Foreign investors net sellers of 4.02 billion Taiwan shares
9. Germany might introduce a EUR 5 billion tax break for commuters to shield consumers from rising petrol prices.
10. OPEC believes that it will need to produce far less oil over the next 12 years than the US has suggested, saying that new supply from regions and biofuels would reduce the need for its oil
11. Dutch consumer confidence falls to -19 from -17 in May
12. Euro Zone May M3 higher by 10.5%, unchanged from April
13. Euro May Loans higher by 10.4% versus 10.6 percent in April
14. Hong Kong Exports higher by 10.3% year on year versus 14.5% in April
15. Taiwan Central Bank will do it can to fight inflation
16. OPEC President sees $150 - $170 per barrel oil in summer
17. US jobless claims unchanged from previous week
18. US Q1 GDP Final came in at 1% as expected
19. US Conference Board Help Wanted Ad index 17 versus 18 in April
20. US May existing homes sales higher by 2% Month on Month
My expectation for the USD cross
1. CAD : Negative
2. JPY : Positive
3. CHF : Positive
4. EUR : Negative
5. AUD : Neutral
6. GBP : Neutral
Bottomline : I expect market volatility to continue, and that the USD might succumb to further weakness
Portfolio Performance : +5.15%
Headline News
1. US Paulson does not see evidence speculators driving oil price
2. Paulson says that oil price rise is mostly a result of supply and demand
3. Paulson says that there is room for improvement in the regulation of the energy futures market
4. Japan May Corporate Price Service Index higher by 0.6% YoY
5. Japan May Trade Surplus 365.61 billion Yen vs 395.55 Billion Yen from a year earlier
6. Financial Times says that Australian resources in demand as never before
7. Taiwan would talk with China on direct shipping and oil exploration in the second half of this year
8. China Q2 banking prosperity index falls to 68.3 percent versus 69.7 percent in Q1
9. South Korean authorities sold as much as $1 USD to boost the KRW, the intervention helped supported the WON, but the currency remains among the five Asian currencies that have fallen by 7 percent or more against the USD
10. Trichet sees inflation remaining high for longer than previously thought
11. Trichet says that ECB is in state of heightened alertness
12. Euro Zone industrial orders were higher by 11.7 percent year on year
13. UK July retail sales expectations fall to -7 percent versus +6 in June
14. Trichet says that commodity prices are driven more by demand than supply
15. The Thai government says that the economy is set to grow 5.6% this year
16. US Durable Goods unchanged in May (no surprises here)
17. Saudi arrests 700 Islamists preparing "oil attacks"
18. US May New Home Sales lower by 2.5 percent to 512 000 versus 515 000 expected
19. Spainish housing slowdown to end in second half of 2009
My expectation for the USD crosses
1. AUD : Positive
2. GBP : Negative
3. CAD : Neutral
4. JPY : Positive
5. CHF : Negative
6. EUR : Positive
Bottomline : I think the market is against the USD, but I am not going to place my bets just yet, I will wait for Bernanke to signal his decision later first
Headline News
1. US Paulson does not see evidence speculators driving oil price
2. Paulson says that oil price rise is mostly a result of supply and demand
3. Paulson says that there is room for improvement in the regulation of the energy futures market
4. Japan May Corporate Price Service Index higher by 0.6% YoY
5. Japan May Trade Surplus 365.61 billion Yen vs 395.55 Billion Yen from a year earlier
6. Financial Times says that Australian resources in demand as never before
7. Taiwan would talk with China on direct shipping and oil exploration in the second half of this year
8. China Q2 banking prosperity index falls to 68.3 percent versus 69.7 percent in Q1
9. South Korean authorities sold as much as $1 USD to boost the KRW, the intervention helped supported the WON, but the currency remains among the five Asian currencies that have fallen by 7 percent or more against the USD
10. Trichet sees inflation remaining high for longer than previously thought
11. Trichet says that ECB is in state of heightened alertness
12. Euro Zone industrial orders were higher by 11.7 percent year on year
13. UK July retail sales expectations fall to -7 percent versus +6 in June
14. Trichet says that commodity prices are driven more by demand than supply
15. The Thai government says that the economy is set to grow 5.6% this year
16. US Durable Goods unchanged in May (no surprises here)
17. Saudi arrests 700 Islamists preparing "oil attacks"
18. US May New Home Sales lower by 2.5 percent to 512 000 versus 515 000 expected
19. Spainish housing slowdown to end in second half of 2009
My expectation for the USD crosses
1. AUD : Positive
2. GBP : Negative
3. CAD : Neutral
4. JPY : Positive
5. CHF : Negative
6. EUR : Positive
Bottomline : I think the market is against the USD, but I am not going to place my bets just yet, I will wait for Bernanke to signal his decision later first
Tuesday, June 24, 2008
Portfolio Performance : 5.15%
Headline News
1. Treasury official says housing correction is currently "in progress"
2. Treasury official says that financial conditions would improve, but not in straight line
3. Think Tank says Ireland heading for recession for the 1st time in 25 years
4. A PBOC survey says that chinese firms expect the CNY to appreciate by 3% in 6 months
5. Germany's GFK sees consumer climate index at 3.9 points vs 4.7 in June
6. French household consumption higher by 2% from April
7. French June business climate indicator 102 vs 102 in May
8. Global inflation fears steepened as Chinese steelmakers agreed to record increase in annual ore prices, which would boost the cost of cars and other machinery products
9. BHP Billiton increases Western Australia iron ore reserve by 23 percent
10. Taiwan May export orders higher by 14.46 percent on year from 15.69% in April
11. UK Mortgage approvals slump to 27 968, the lowest in a decade, says BBA
12. Spain Jan-May budget surplus 2.722 billion Euros versus 14.36 billion Euros surplus 2007
13. Russia GDP higher by 7.7% year on year
14. Thailand and US to resume free trade talks
15. US April S&P Case Shiller Home price index falls 15.3% year on year
16. US Fed Manufacturing index -12 versus -3 in May
My epextation for the USD crosses
1. AUD : Positive
2. GBP : Negative
3. CAD : Neutral
4. JPY : Positive
5. CHF : Negative
6. EUR : Positive
Bottomline : I expect volatility to continue, I expect the market to probably set the tone after the Fed meeting which ends tommorrow
Headline News
1. Treasury official says housing correction is currently "in progress"
2. Treasury official says that financial conditions would improve, but not in straight line
3. Think Tank says Ireland heading for recession for the 1st time in 25 years
4. A PBOC survey says that chinese firms expect the CNY to appreciate by 3% in 6 months
5. Germany's GFK sees consumer climate index at 3.9 points vs 4.7 in June
6. French household consumption higher by 2% from April
7. French June business climate indicator 102 vs 102 in May
8. Global inflation fears steepened as Chinese steelmakers agreed to record increase in annual ore prices, which would boost the cost of cars and other machinery products
9. BHP Billiton increases Western Australia iron ore reserve by 23 percent
10. Taiwan May export orders higher by 14.46 percent on year from 15.69% in April
11. UK Mortgage approvals slump to 27 968, the lowest in a decade, says BBA
12. Spain Jan-May budget surplus 2.722 billion Euros versus 14.36 billion Euros surplus 2007
13. Russia GDP higher by 7.7% year on year
14. Thailand and US to resume free trade talks
15. US April S&P Case Shiller Home price index falls 15.3% year on year
16. US Fed Manufacturing index -12 versus -3 in May
My epextation for the USD crosses
1. AUD : Positive
2. GBP : Negative
3. CAD : Neutral
4. JPY : Positive
5. CHF : Negative
6. EUR : Positive
Bottomline : I expect volatility to continue, I expect the market to probably set the tone after the Fed meeting which ends tommorrow
Portfolio Performance : 5.14%
Headline News
1. Saudi Arabia's Al Naimi says world oil supplies are enough for decades
2. PBOC Governor Zhou has signalled tougher action in the fight against inflation
3. UK property website Rightmove said that the asking price of a UK home was nearly 3000 pounds lower in June compared to May
4. Japan Large Firms Q2 business conditions index -15.2 versus -9.3 in Q1
5. Japan companies FY CAPEX seen down 0.9% versus down 9.4% in March
6. The Australian Bureau of Statistics said that motor sales were 2.6% higher from a year ago but fell 1.6% from May
7. Singapore CPI higher by 7.5% year on year, consensus looking at 7.9% year on year
8. French June provisional Services PMI 49.2 versus 50.5 in May
9. German June provisional Services PMI 52.3, consensus looking for 53.2
10. Taiwan May unemployment 3.84% versus 3.81% in April
11. German IFO June Business climate index 101.3 versus 103.5 in May
12. Euro Zone June Composite PMI 49.5 versus 51.1 in May
My expectation for the USD crosses
1. AUD : Neutral
2. GBP : Neutral
3. CAD : Positive
4. JPY : Positive
5. CHF : Negative
6. EUR : Positive
Bottomline : The market is preparing for the US rate decision, where most participants expect a hold at 200 basis points. I think we might see some volatility in the crosses after the announcement on Wednesday
Headline News
1. Saudi Arabia's Al Naimi says world oil supplies are enough for decades
2. PBOC Governor Zhou has signalled tougher action in the fight against inflation
3. UK property website Rightmove said that the asking price of a UK home was nearly 3000 pounds lower in June compared to May
4. Japan Large Firms Q2 business conditions index -15.2 versus -9.3 in Q1
5. Japan companies FY CAPEX seen down 0.9% versus down 9.4% in March
6. The Australian Bureau of Statistics said that motor sales were 2.6% higher from a year ago but fell 1.6% from May
7. Singapore CPI higher by 7.5% year on year, consensus looking at 7.9% year on year
8. French June provisional Services PMI 49.2 versus 50.5 in May
9. German June provisional Services PMI 52.3, consensus looking for 53.2
10. Taiwan May unemployment 3.84% versus 3.81% in April
11. German IFO June Business climate index 101.3 versus 103.5 in May
12. Euro Zone June Composite PMI 49.5 versus 51.1 in May
My expectation for the USD crosses
1. AUD : Neutral
2. GBP : Neutral
3. CAD : Positive
4. JPY : Positive
5. CHF : Negative
6. EUR : Positive
Bottomline : The market is preparing for the US rate decision, where most participants expect a hold at 200 basis points. I think we might see some volatility in the crosses after the announcement on Wednesday
Saturday, June 21, 2008
Portfolio Performance : +5.13%
Headline News
1. US Paulson says that energy prices prolonging hard times
2. Newspaper stocks fall after Goldman downgrade
3. Moody's said that the 3 leading Singapore banks should still see growth this year, but might struggle to show growth next year as bad loans start to rise.
4. Malaysia's manufacturing sales in April rose 18.5% from a year earlier led by refined petroleum products, electronics, iron and steel products and chemicals
5. Vietnam said that it would export more rice after it has ensured that domestic market is well supplied first
6. Swiss producer and import prices in March were higher by 3.9% year on year
7. Dutch April consumer spending rises 2.1% year on year
8. Italy April industrial sales higher by 13.9% year on year, orders higher by 12.8%
9.Hong Kong CPI higher by 5.7% in May vs 5.4% in April
10. India inflation rate accelerated to a 13 year high on a recent fuel hike in retail fuel prices and because of an increase in prices of non food items. The WPI rose 11.05% for the week ended June 7
11. Thousands of Thai protestors breached a police barricade and surrounded the government office on Friday
12. Rumors filled the market of European banks in trouble, a US broker to report earnings downgrade, which caused a negative USD and spreads to widen
13. IMF says that US recovery will be more gradual than previous recessions
My expectation for the USD crosses
1. AUD : Neutral
2. GBP : Neutral
3. CAD : Positive
4. JPY : Positive
5. CHF : Negative
6. EUR : Neutral
Bottomline : The US dollar might be under some pressure on financial market turmoil
Headline News
1. US Paulson says that energy prices prolonging hard times
2. Newspaper stocks fall after Goldman downgrade
3. Moody's said that the 3 leading Singapore banks should still see growth this year, but might struggle to show growth next year as bad loans start to rise.
4. Malaysia's manufacturing sales in April rose 18.5% from a year earlier led by refined petroleum products, electronics, iron and steel products and chemicals
5. Vietnam said that it would export more rice after it has ensured that domestic market is well supplied first
6. Swiss producer and import prices in March were higher by 3.9% year on year
7. Dutch April consumer spending rises 2.1% year on year
8. Italy April industrial sales higher by 13.9% year on year, orders higher by 12.8%
9.Hong Kong CPI higher by 5.7% in May vs 5.4% in April
10. India inflation rate accelerated to a 13 year high on a recent fuel hike in retail fuel prices and because of an increase in prices of non food items. The WPI rose 11.05% for the week ended June 7
11. Thousands of Thai protestors breached a police barricade and surrounded the government office on Friday
12. Rumors filled the market of European banks in trouble, a US broker to report earnings downgrade, which caused a negative USD and spreads to widen
13. IMF says that US recovery will be more gradual than previous recessions
My expectation for the USD crosses
1. AUD : Neutral
2. GBP : Neutral
3. CAD : Positive
4. JPY : Positive
5. CHF : Negative
6. EUR : Neutral
Bottomline : The US dollar might be under some pressure on financial market turmoil
Thursday, June 19, 2008
Portfolio Performance : +5.12%
Actions Performed : I closed my USD/CHF trade, which helped the performance of the portfolio
Headline News
1. London's Business leaders have become pessimistic about the capital's competitiveness and their firm's future prospects fue to poorly handled reforms by the Treasury and the economic downturn
2. China agrees to ease rules for insurance companies and foreign investors in China's securities market as part of this week's meeting of the US-China Strategic Economic Dialogue
3. Japan's All industry index higher by 0.8 percent from March
4. Gains in the service sector offset weak industrial output
5. Markets anticipating an interest rate raise at upcoming Taiwan Central Bank meeting
6. The People's Bank of China sold three year bank bills in open market
7. World Bank says that China's money supply is under control and inflation is stable
8. Singapore releases 13 new land sites for sale in the second half of this year
9. Swiss May Trade Balance widens to 1.87 Billion Francs
10. Thailand's PM under attack from all sides
11. CHF weakens as SNB sounds relaxed
12. Dutch unemployment at 4.1 percent vs 4.7% from a year ago
13. British May retail Sales came in at 8.1% year on year, higher than expected
14. Maalysia said that it would go ahead with two major infrastructure projects despite its plan to review some projects under the state development blueprint
15. Shell shuts down 200 000 barrels of production at Nigerian oil field
16. US jobless claims falls 5000 to 381 000, continuing claims fall 76 000
17. China will raise petrol and diesel prices from Friday, the average electricity price will rise 2.5% from July 1
18. US Philly Fed Employment Index -6.9 versus -1 in May
19. S&P said that Vietname may experience sharp correction in economic growth
My expectations for the FX USD crosses
1. AUD : Neutral
2. GBP : Neutral
3. CAD : Positive
4. JPY : Positive
5. CHF : Negative
6. EUR : Neutral
Bottomline : I think we will continue to see volatility in the market
Actions Performed : I closed my USD/CHF trade, which helped the performance of the portfolio
Headline News
1. London's Business leaders have become pessimistic about the capital's competitiveness and their firm's future prospects fue to poorly handled reforms by the Treasury and the economic downturn
2. China agrees to ease rules for insurance companies and foreign investors in China's securities market as part of this week's meeting of the US-China Strategic Economic Dialogue
3. Japan's All industry index higher by 0.8 percent from March
4. Gains in the service sector offset weak industrial output
5. Markets anticipating an interest rate raise at upcoming Taiwan Central Bank meeting
6. The People's Bank of China sold three year bank bills in open market
7. World Bank says that China's money supply is under control and inflation is stable
8. Singapore releases 13 new land sites for sale in the second half of this year
9. Swiss May Trade Balance widens to 1.87 Billion Francs
10. Thailand's PM under attack from all sides
11. CHF weakens as SNB sounds relaxed
12. Dutch unemployment at 4.1 percent vs 4.7% from a year ago
13. British May retail Sales came in at 8.1% year on year, higher than expected
14. Maalysia said that it would go ahead with two major infrastructure projects despite its plan to review some projects under the state development blueprint
15. Shell shuts down 200 000 barrels of production at Nigerian oil field
16. US jobless claims falls 5000 to 381 000, continuing claims fall 76 000
17. China will raise petrol and diesel prices from Friday, the average electricity price will rise 2.5% from July 1
18. US Philly Fed Employment Index -6.9 versus -1 in May
19. S&P said that Vietname may experience sharp correction in economic growth
My expectations for the FX USD crosses
1. AUD : Neutral
2. GBP : Neutral
3. CAD : Positive
4. JPY : Positive
5. CHF : Negative
6. EUR : Neutral
Bottomline : I think we will continue to see volatility in the market
Wednesday, June 18, 2008
Portfolio Performance : +4.09%
Headline News
1. Goldman Sachs analyst said that credit card losses would continue to deteriorate till 2009, banks with exposure to the securities are Citigroup, Bank of America and JP Morgan and Chase
2. Chinese officials said that price controls in market will continue
3. The Philippines recorded a net outflow of $158.1 million in foreign portfolio investments in May as investors fret over consumer prices and external factor effects on the economy
4. Japan's April Coincident index 101.7 unchanged from initial estimate
5. Japan May Department Sales down 2.7% year on year
6. Czech Retail Sales higher by 4.6% versus 5.6% expectations
7. Bank of England kept rates unchanged
8. Opposition lodge a vote of no confidence against Thai prime minister
9. According to Merrill Lynch, most fund managers are most underweight equities in a decade
10. The National Assciation of Realtors said that the credit crunch is beginning to cause significant damage to the commercial real estate business
My expectations for the FX crosses against USD
1. AUD : Neutral
2. GBP : Neutral
3. CAD : Positive
4. JPY : Neutral
5. CHF : Negative
6. EUR : Positive
Bottomline: I am still into my USD / CHF long trade, I continue to expect volatility in the market
Headline News
1. Goldman Sachs analyst said that credit card losses would continue to deteriorate till 2009, banks with exposure to the securities are Citigroup, Bank of America and JP Morgan and Chase
2. Chinese officials said that price controls in market will continue
3. The Philippines recorded a net outflow of $158.1 million in foreign portfolio investments in May as investors fret over consumer prices and external factor effects on the economy
4. Japan's April Coincident index 101.7 unchanged from initial estimate
5. Japan May Department Sales down 2.7% year on year
6. Czech Retail Sales higher by 4.6% versus 5.6% expectations
7. Bank of England kept rates unchanged
8. Opposition lodge a vote of no confidence against Thai prime minister
9. According to Merrill Lynch, most fund managers are most underweight equities in a decade
10. The National Assciation of Realtors said that the credit crunch is beginning to cause significant damage to the commercial real estate business
My expectations for the FX crosses against USD
1. AUD : Neutral
2. GBP : Neutral
3. CAD : Positive
4. JPY : Neutral
5. CHF : Negative
6. EUR : Positive
Bottomline: I am still into my USD / CHF long trade, I continue to expect volatility in the market
Tuesday, June 17, 2008
Portfolio Performance : +4.02%
Headline News
1. US NAHB Housing Index falls to 18 vs expectations of 20 (shows that US housing is still in a mess)
2. Japan's Tetiary Index higher by 1.8 percent in April from March
3. Indonesian actual investments in the first five months surged to 80.9 percent to 93.9 trillion rupiah from 51.9 trillion a year ago
4. Australian Central Bank saw current monetary policy as adequate
5. Philippines unemployment rate edged to 8% from 7.4% in April from a year ago
6. Singapore Non Oil Domestic Exports Fall 10.5% year on year as pharmaceutical shipments fall. Pharmaceuticals actually fell 48.5% year on year! (This is sure to hit the press tomorrow)
7. Hong Kong March-May unemployment rate at 3.3 percent unchanged from Feb- April
8. UK annual May CPI rises to 3.3% from 3% in April
9. Euro Zone April Trade Surplus 2.3 billion Euros vs 1.5B deficit in March
10. Germany June Economic expectations -52.4 versus -41.4 in April
11. US wholesale inflation up 1.4% in May while core inflation was higher by 0.2%
12. US builders slowed construction on new homes in May in an effort to reduce inventory. Housing starts fell 3.3% to 975 000 unit rate, the lowest since 1991
My Expectations for the USD Crosses
1. AUD : Neutral
2. GBP : Neutral
3. CAD : Positive
4. JPY : Neutral
5. CHF : Negative
6. EUR : Neutral
End of the Day: I am still keeping my Long USD/CHF trade, I think we might face some volatility, so we will see how things move along
Headline News
1. US NAHB Housing Index falls to 18 vs expectations of 20 (shows that US housing is still in a mess)
2. Japan's Tetiary Index higher by 1.8 percent in April from March
3. Indonesian actual investments in the first five months surged to 80.9 percent to 93.9 trillion rupiah from 51.9 trillion a year ago
4. Australian Central Bank saw current monetary policy as adequate
5. Philippines unemployment rate edged to 8% from 7.4% in April from a year ago
6. Singapore Non Oil Domestic Exports Fall 10.5% year on year as pharmaceutical shipments fall. Pharmaceuticals actually fell 48.5% year on year! (This is sure to hit the press tomorrow)
7. Hong Kong March-May unemployment rate at 3.3 percent unchanged from Feb- April
8. UK annual May CPI rises to 3.3% from 3% in April
9. Euro Zone April Trade Surplus 2.3 billion Euros vs 1.5B deficit in March
10. Germany June Economic expectations -52.4 versus -41.4 in April
11. US wholesale inflation up 1.4% in May while core inflation was higher by 0.2%
12. US builders slowed construction on new homes in May in an effort to reduce inventory. Housing starts fell 3.3% to 975 000 unit rate, the lowest since 1991
My Expectations for the USD Crosses
1. AUD : Neutral
2. GBP : Neutral
3. CAD : Positive
4. JPY : Neutral
5. CHF : Negative
6. EUR : Neutral
End of the Day: I am still keeping my Long USD/CHF trade, I think we might face some volatility, so we will see how things move along
Portfolio Performance : +3.99%
Actions : Went long USD/CHF as I expect US dollar to retain its strength
Headline News
1. China will ease price controls on oil and gas products "at an appropriate time" China is capping domestic oil, gas and power prices denying energy companies the option to pass the cost to consumers, which has caused price levels to inflate
2. China May Industrial Output higher by 16% from a year earlier
3. Singapore Q1 unemployment rate was 2% vs 1.7% in Q4
4. China Jan - May fixed asset investment rose 25.6% from a year earlier
5. Tokyo condominium sales down 17.7% year on year
6. Philippines recorded $42 million surplus BOP on remittance from overseas Filipinos
7. NZD under pressure as talk of a possible recession coming for the economy
8. Russia Q1 GDP was 8.5% higher YoY
9. Euro May HICP wsa 3.7%, above expectations
10. US Empire State Manufacturing Index for June was -8.93 vs -3.23 in May
Expectation for the FX Crosses Against the USD
1. AUD : Neutral
2. GBP : Neutral
3. CAD : Neutral
4. YEN : Negative, Yen depreciation on US dollar bullish sentiment
5. CHF : Negative, Long USD/CHF at 1.04289
6. EUR : Negative
Actions : Went long USD/CHF as I expect US dollar to retain its strength
Headline News
1. China will ease price controls on oil and gas products "at an appropriate time" China is capping domestic oil, gas and power prices denying energy companies the option to pass the cost to consumers, which has caused price levels to inflate
2. China May Industrial Output higher by 16% from a year earlier
3. Singapore Q1 unemployment rate was 2% vs 1.7% in Q4
4. China Jan - May fixed asset investment rose 25.6% from a year earlier
5. Tokyo condominium sales down 17.7% year on year
6. Philippines recorded $42 million surplus BOP on remittance from overseas Filipinos
7. NZD under pressure as talk of a possible recession coming for the economy
8. Russia Q1 GDP was 8.5% higher YoY
9. Euro May HICP wsa 3.7%, above expectations
10. US Empire State Manufacturing Index for June was -8.93 vs -3.23 in May
Expectation for the FX Crosses Against the USD
1. AUD : Neutral
2. GBP : Neutral
3. CAD : Neutral
4. YEN : Negative, Yen depreciation on US dollar bullish sentiment
5. CHF : Negative, Long USD/CHF at 1.04289
6. EUR : Negative
Wednesday, June 11, 2008
Portfolio Performance : +3.99%
Actions: I exited my long on the GBP against the USD in a day, which helped the performance of the portfolio
Headline News
1. Japan Revised Q1 GDP up 1% versus 0.8% initial estimate
2. Japan Q1 non residential investment + 0.2% vs -0.9%
3. Australian consumer sentiment index falls to 15 year low
4. China May PPI higher by 9.2% YoY
5. Australia says that free trade agreement with China will resume soon
6. Two truck drivers were killed in Spain and portugal as they protest against high fuel costs (Now, this is serious. I mean, we are seeing people dying because of high commodity prices... It really brings to question the ethics of investing into commodities. No doubt it is an effective hedge against inflation, but think about the serious consequence for those who do not have the access to the financial instrument. Those of you who are long on crude, You have blood on your hands)
7. China May January - May Crude Imports higher by 12.7% YoY, Soybean Imports higher by 20.4% YoY
8. France CPI higher by 3.4% YoY
9. UK jobless higher by 9000 in May
10. Speculation of M&A for Aussie companies keeping AUD afloat
Expectations for the FX crosses
1. AUD : I am Neutral
2. GBP : Turning Negative, the Claimant number is getting higher
3. CAD : I am Negative
4. YEN : I am Negative
5. CHF : Positive
6. EUR : Neutral
End of the Day : Fed Hawkish talk still lingers in the market, which might lend support for the USD
Actions: I exited my long on the GBP against the USD in a day, which helped the performance of the portfolio
Headline News
1. Japan Revised Q1 GDP up 1% versus 0.8% initial estimate
2. Japan Q1 non residential investment + 0.2% vs -0.9%
3. Australian consumer sentiment index falls to 15 year low
4. China May PPI higher by 9.2% YoY
5. Australia says that free trade agreement with China will resume soon
6. Two truck drivers were killed in Spain and portugal as they protest against high fuel costs (Now, this is serious. I mean, we are seeing people dying because of high commodity prices... It really brings to question the ethics of investing into commodities. No doubt it is an effective hedge against inflation, but think about the serious consequence for those who do not have the access to the financial instrument. Those of you who are long on crude, You have blood on your hands)
7. China May January - May Crude Imports higher by 12.7% YoY, Soybean Imports higher by 20.4% YoY
8. France CPI higher by 3.4% YoY
9. UK jobless higher by 9000 in May
10. Speculation of M&A for Aussie companies keeping AUD afloat
Expectations for the FX crosses
1. AUD : I am Neutral
2. GBP : Turning Negative, the Claimant number is getting higher
3. CAD : I am Negative
4. YEN : I am Negative
5. CHF : Positive
6. EUR : Neutral
End of the Day : Fed Hawkish talk still lingers in the market, which might lend support for the USD
(It has been a long time since I blogged, I will starting to blog to keep track of my views of the market as well as to track my current expectations of the forex pairs)
Portfolio Performance : 0%
Headline news today
1. Bank of Canada holds rates at 3%
2. US Fed insisting inflationary views, lends support to USD
3. Lots of focus on oil today, world protests high commodity prices
4. Gold sell off on pressure from oil and USD
5. Regulators focusing on easing commodity prices in the long term, coming up with solutions to solve food and oil crisis
My expectations for the following pairs against the USD
1. AUD - neutral, I expect it to be range bound
2. GBP - positive, bought at 1.9535
3. CAD - negative, I will wait and see
4. YEN - shaky on USD pressure, the pair might rally
5. CHF - weak on USD pressure
6. EUR - neutral, but might succumb to USD pressure
End of the Day: I think the USD is pressuring the pairs on Fed Talk, Bond and Gold Sell Off.
Portfolio Performance : 0%
Headline news today
1. Bank of Canada holds rates at 3%
2. US Fed insisting inflationary views, lends support to USD
3. Lots of focus on oil today, world protests high commodity prices
4. Gold sell off on pressure from oil and USD
5. Regulators focusing on easing commodity prices in the long term, coming up with solutions to solve food and oil crisis
My expectations for the following pairs against the USD
1. AUD - neutral, I expect it to be range bound
2. GBP - positive, bought at 1.9535
3. CAD - negative, I will wait and see
4. YEN - shaky on USD pressure, the pair might rally
5. CHF - weak on USD pressure
6. EUR - neutral, but might succumb to USD pressure
End of the Day: I think the USD is pressuring the pairs on Fed Talk, Bond and Gold Sell Off.
Monday, March 05, 2007
Fund Performance (incetion date : 4 Dec 06) : 0.66971% per day
5th Mar 07
EUR (Neutral) - Price inflation levels will be lower than what the European Central Bank deems as excessive. National European governments have started to worry that a tight monetary policy might stop economic recovery in the single-currency bloc. The ECB is set to lower its inflation forecast to about 1.8 per cent or 1.9 per cent, reflecting the recent decline in oil prices.
Later
0830h - AUD : Trade Balance / Building Approvals
1445h - CHF : GDP
1800h - EUR : Euro Zone Retail Sales
2200h - CAD : Rate Decision
5th Mar 07
EUR (Neutral) - Price inflation levels will be lower than what the European Central Bank deems as excessive. National European governments have started to worry that a tight monetary policy might stop economic recovery in the single-currency bloc. The ECB is set to lower its inflation forecast to about 1.8 per cent or 1.9 per cent, reflecting the recent decline in oil prices.
Later
0830h - AUD : Trade Balance / Building Approvals
1445h - CHF : GDP
1800h - EUR : Euro Zone Retail Sales
2200h - CAD : Rate Decision
Monday, February 05, 2007
Fund Performance per day (inception date : 4 Dec 06) : 0.97575%
5 Feb 07
EUR (Losing Strength) - When the finance ministers from the G7 meet in Germany next weekend, European policy makers have said they will push for a discussion about Japan's low currency, the yen's low value gives Japanese exporters an unfair edge against competitors that have to pay for their costs in euros. Traders will focus on the Rate Decision and Trichet on Thursday, and sentiment has it that the BOE is less likely to raise rates in the short term, a rate hike is more likely in March.
GBP (Losing Strength) - Only five of the 62 economists surveyed by Reuters in recent days think the Bank's monetary policy committee will stage a back-to-back rise at the end of its two-day meeting on Thursday. The uncertainty revolves around whether last month's increase merely brought forward an expected February rate rise - or whether the MPC's view of inflation risk has changed to the point where it felt additional tightening was required. Although recent mortgage lending data suggest that the 0.75 percentage point rise in interest rates since last August may be starting to have an impact, most of the recent economic data have been strong, in terms of pay settlements and signs of companies pushing through higher prices.
Later
5 Feb 07
EUR (Losing Strength) - When the finance ministers from the G7 meet in Germany next weekend, European policy makers have said they will push for a discussion about Japan's low currency, the yen's low value gives Japanese exporters an unfair edge against competitors that have to pay for their costs in euros. Traders will focus on the Rate Decision and Trichet on Thursday, and sentiment has it that the BOE is less likely to raise rates in the short term, a rate hike is more likely in March.
GBP (Losing Strength) - Only five of the 62 economists surveyed by Reuters in recent days think the Bank's monetary policy committee will stage a back-to-back rise at the end of its two-day meeting on Thursday. The uncertainty revolves around whether last month's increase merely brought forward an expected February rate rise - or whether the MPC's view of inflation risk has changed to the point where it felt additional tightening was required. Although recent mortgage lending data suggest that the 0.75 percentage point rise in interest rates since last August may be starting to have an impact, most of the recent economic data have been strong, in terms of pay settlements and signs of companies pushing through higher prices.
Later
2300h - USD : Non Manufacturing Index
2300h - CAD : Ivey Purchasing Managers Index
Thursday, January 25, 2007
Fund Performance per day (inception date : 4 Dec 06) : 0.97166%
25 Jan 07
NZD - (Bullish) The Reserve Bank of New Zealand surprised markets through its interest rate announcement, leaving the Overnight Cash Rate at 7.25 percent but hinting that the next rate move would likely be a hike. As often occurs with fundamental data releases, markets posted a knee-jerk reaction to the headline number, only to reverse course when the full implications of the news became clear.
Later
1510h - EUR : German Consumer Confidence
1700h - EUR : German IFO (Jan)
1700h - EUR : Euro Current Account (Nov)
1900h - NZD : Purchasing Managers Index
2300h - USD : Exisiting Home Sales
25 Jan 07
JPY (Turning Bullish) - The increase in the trade surplus last month confirms that exports remain strong and therefore that US consumer spending is resilient, Daiwa Institute of Research Institute senior economist Junichi Makino said. 'The latest data clearly showed that US consumer demand for Japanese-made products such as automobiles remains strong, as the collapse of the housing market there has not so far weakened purchasing power.'The prolonged solidity of exports, led by shipments to the US, is likely to continue to support the Japanese economy at a time when domestic private consumption is sagging,' Makino said.
24 Jan 07NZD - (Bullish) The Reserve Bank of New Zealand surprised markets through its interest rate announcement, leaving the Overnight Cash Rate at 7.25 percent but hinting that the next rate move would likely be a hike. As often occurs with fundamental data releases, markets posted a knee-jerk reaction to the headline number, only to reverse course when the full implications of the news became clear.
Later
1510h - EUR : German Consumer Confidence
1700h - EUR : German IFO (Jan)
1700h - EUR : Euro Current Account (Nov)
1900h - NZD : Purchasing Managers Index
2300h - USD : Exisiting Home Sales
Monday, January 22, 2007
Fund Performance per day (inception date : 4 Dec 06) : 0.71589%
19 Jan 07
USD (Gaining Strength) - Federal Reserve Chairman Ben Bernanke warned that rising health-care and Social Security spending could create a "vicious cycle" of rising debt and interest payments and an eventual fiscal crisis. The Fed could keep or raise interest rates to encourage Americans to save up and keep inflationary pressures at bay.
JPY (Neutral) - Japan needs to see more economic strength to lend more weight for the BoJ to increase rates. Personal consumption remains sluggish: wages are stubbornly flat, discouraging spending. The household consumer index shows confidence last month hit its lowest ebb in two years. Stripping out energy, Japanese prices are still falling. Unfortunately, that is not the case championed by the hawkish Bank of Japan, which has been stressing its "forward-looking" credentials and a rosier outlook.
EUR (Bullish) - European Union Economic and Monetary Affairs Commissioner Joaquin Almunia said the risk to growth of a three percentage-point rise in German sales tax, instituted Jan. 1, "has been overestimated," He forecast Germany and France would continue to cut public deficits, contributing to a wider correction in euro-area budget imbalances.
22 Jan 07
1500h - EUR : German PPI
1615h - CHF : Producer and Import Prices
19 Jan 07
USD (Gaining Strength) - Federal Reserve Chairman Ben Bernanke warned that rising health-care and Social Security spending could create a "vicious cycle" of rising debt and interest payments and an eventual fiscal crisis. The Fed could keep or raise interest rates to encourage Americans to save up and keep inflationary pressures at bay.
JPY (Neutral) - Japan needs to see more economic strength to lend more weight for the BoJ to increase rates. Personal consumption remains sluggish: wages are stubbornly flat, discouraging spending. The household consumer index shows confidence last month hit its lowest ebb in two years. Stripping out energy, Japanese prices are still falling. Unfortunately, that is not the case championed by the hawkish Bank of Japan, which has been stressing its "forward-looking" credentials and a rosier outlook.
EUR (Bullish) - European Union Economic and Monetary Affairs Commissioner Joaquin Almunia said the risk to growth of a three percentage-point rise in German sales tax, instituted Jan. 1, "has been overestimated," He forecast Germany and France would continue to cut public deficits, contributing to a wider correction in euro-area budget imbalances.
22 Jan 07
1500h - EUR : German PPI
1615h - CHF : Producer and Import Prices
Wednesday, January 17, 2007
Fund Performance per day (inception date : 4 Dec 06) : 0.05957%
Yesterday
JPY - (Turning Bullish) Japan's economic expansion recently has been a one-sided affair: Corporations are booming, but consumers are not benefiting. Japanese corporate earnings are expected to rise this fiscal year for the fifth consecutive time. Stock and real-estate prices are climbing -- a contrast to the declines they experienced for a decade until the early 2000s. Help-wanted signs are everywhere, and the jobless rate fell to an eight-year low of 4% in November. The economy as a whole has been expanding for nearly five years. But one key element has failed to materialize: Growth in workers' wages. Even as many Japanese companies report record earnings, they aren't sharing the fruits with employees.
USD - (Neutral) Policymakers and bond market investors alike appear more confident about the resilience of the broad US economy in 2007, with its still-thriving service sector, strong jobs market and improving exports. The data is giving mixed signals, with some measures suggesting that the housing market is bottoming out, while others point to further weakness to come. Even if demand for houses does remain stable at current levels, both construction and house prices could face continued weakness because of the large overhang of unsold homes - 6.3 months of sales for new homes in November (more if adjusted for cancellations).
Oil (Range Bound) - The Organisation of the Petroleum Exporting Countries, the oil cartel, is becoming increasingly concerned but also hamstrung about what to do about the recent 15 per cent drop in oil prices. Members such as Saudi Arabia, the group's biggest and most powerful exporter, fret that another move to cut output could damp prices even more if members do not stick to last year's agreement to cut production. One of the problems for Opec is that nobody seems sure why oil prices have fallen so dramatically. Fundamental supply and demand conditions seem to contradict it - making the challenge faced by the 11 members, who deal in real barrels rather than futures contracts, even greater.
EUR (Bullish) - German labor unions accepted meager pay raises for several years in the face of slow economic growth, high unemployment and the threat of companies shifting jobs to cheaper locations. This year, many union leaders have decided it is payback time. In the wake of healthy economic growth and fat corporate profits last year, key unions are making a push for wage increases of roughly triple the inflation rate. Such raises could boost consumer spending in Europe's largest economy, but employers worry it would erode gains in cost competitiveness that have helped Germany lead Europe's economic recovery as it became the world's largest exporter in terms of value. If German pay increases outstrip productivity gains, they could force the European Central Bank to raise interest rates aggressively, crimping growth in the 13-nation euro zone, economists say. After adjustment for inflation, wages went flat in 2002 and have declined the past couple years.
Later
1300h - JPY : Consumer Confidence
1500h - EUR : German CPI
1800h - EUR : Euro zone CPI
2130h - USD : USD PPI
Technicals
Trade strategy : Buy EUR.JPY at 15525-15555 , stop below 15420, Target: 15720, 15780, 15805.If the EUR.JPY trades lower than 15420, then should sell EUR.JPY, stop above 15530.
Yesterday
JPY - (Turning Bullish) Japan's economic expansion recently has been a one-sided affair: Corporations are booming, but consumers are not benefiting. Japanese corporate earnings are expected to rise this fiscal year for the fifth consecutive time. Stock and real-estate prices are climbing -- a contrast to the declines they experienced for a decade until the early 2000s. Help-wanted signs are everywhere, and the jobless rate fell to an eight-year low of 4% in November. The economy as a whole has been expanding for nearly five years. But one key element has failed to materialize: Growth in workers' wages. Even as many Japanese companies report record earnings, they aren't sharing the fruits with employees.
USD - (Neutral) Policymakers and bond market investors alike appear more confident about the resilience of the broad US economy in 2007, with its still-thriving service sector, strong jobs market and improving exports. The data is giving mixed signals, with some measures suggesting that the housing market is bottoming out, while others point to further weakness to come. Even if demand for houses does remain stable at current levels, both construction and house prices could face continued weakness because of the large overhang of unsold homes - 6.3 months of sales for new homes in November (more if adjusted for cancellations).
Oil (Range Bound) - The Organisation of the Petroleum Exporting Countries, the oil cartel, is becoming increasingly concerned but also hamstrung about what to do about the recent 15 per cent drop in oil prices. Members such as Saudi Arabia, the group's biggest and most powerful exporter, fret that another move to cut output could damp prices even more if members do not stick to last year's agreement to cut production. One of the problems for Opec is that nobody seems sure why oil prices have fallen so dramatically. Fundamental supply and demand conditions seem to contradict it - making the challenge faced by the 11 members, who deal in real barrels rather than futures contracts, even greater.
EUR (Bullish) - German labor unions accepted meager pay raises for several years in the face of slow economic growth, high unemployment and the threat of companies shifting jobs to cheaper locations. This year, many union leaders have decided it is payback time. In the wake of healthy economic growth and fat corporate profits last year, key unions are making a push for wage increases of roughly triple the inflation rate. Such raises could boost consumer spending in Europe's largest economy, but employers worry it would erode gains in cost competitiveness that have helped Germany lead Europe's economic recovery as it became the world's largest exporter in terms of value. If German pay increases outstrip productivity gains, they could force the European Central Bank to raise interest rates aggressively, crimping growth in the 13-nation euro zone, economists say. After adjustment for inflation, wages went flat in 2002 and have declined the past couple years.
Later
1300h - JPY : Consumer Confidence
1500h - EUR : German CPI
1800h - EUR : Euro zone CPI
2130h - USD : USD PPI
Technicals
Trade strategy : Buy EUR.JPY at 15525-15555 , stop below 15420, Target: 15720, 15780, 15805.If the EUR.JPY trades lower than 15420, then should sell EUR.JPY, stop above 15530.
Thursday, January 04, 2007
Fund Performance per day (inception : 4 Dec 06) : -0.95259%
Friday
USD (Slight Bearish) - Federal Reserve officials may be beginning to share the bond market's pessimism about the outlook for economic growth, a summary of the Fed's Dec. 12 policy meeting shows. At that meeting, the Fed left its short-term interest-rate target at 5.25% and said afterward that inflation was its principal concern and that any decision on raising rates would depend on incoming data. The summary said that "several" of the Fed's 11 voting policy makers thought the "subdued tone" of some recent economic indicators "meant that the downside risks to economic growth in the near term had increased a little and become a bit more broadly based than previously thought."
EUR (bullish) - German unemployment last month recorded its biggest monthly drop since the country's reunification 17 years ago, underscoring the strength of the rebound under way in Europe's biggest economy. The data mean that German unemployment fell by 597,000 last year…This "extraordinary decrease in unemployment", as the agency described it, put the jobless rate at 9.8 per cent. The data follow upbeat business sentiment surveys at the end of December and will buttress the view shared by most economists that the strong German recovery will last well into 2007, in spite of a three-point rise in value-added tax this month. The Ifo business sentiment index surged to a 16-year high last month after notching up the fastest growth in 2006 since the start of the decade.
Monday
USD (Bullish) The home-building industry is about to stop hurting the U.S. economy and later this year may start to help it. The housing demand that is beginning to stir may be unleashing faster growth. Housing prices surged this decade in Australia and Britain, peaking earlier than in the United States. Falling prices and sales in those countries proved to be only a temporary drag on economic growth, followed by rapid recovery.
Later
1500h : EUR - Trade Balance
1900h : EUR - German Industrial Production
Friday
USD (Slight Bearish) - Federal Reserve officials may be beginning to share the bond market's pessimism about the outlook for economic growth, a summary of the Fed's Dec. 12 policy meeting shows. At that meeting, the Fed left its short-term interest-rate target at 5.25% and said afterward that inflation was its principal concern and that any decision on raising rates would depend on incoming data. The summary said that "several" of the Fed's 11 voting policy makers thought the "subdued tone" of some recent economic indicators "meant that the downside risks to economic growth in the near term had increased a little and become a bit more broadly based than previously thought."
EUR (bullish) - German unemployment last month recorded its biggest monthly drop since the country's reunification 17 years ago, underscoring the strength of the rebound under way in Europe's biggest economy. The data mean that German unemployment fell by 597,000 last year…This "extraordinary decrease in unemployment", as the agency described it, put the jobless rate at 9.8 per cent. The data follow upbeat business sentiment surveys at the end of December and will buttress the view shared by most economists that the strong German recovery will last well into 2007, in spite of a three-point rise in value-added tax this month. The Ifo business sentiment index surged to a 16-year high last month after notching up the fastest growth in 2006 since the start of the decade.
Monday
USD (Bullish) The home-building industry is about to stop hurting the U.S. economy and later this year may start to help it. The housing demand that is beginning to stir may be unleashing faster growth. Housing prices surged this decade in Australia and Britain, peaking earlier than in the United States. Falling prices and sales in those countries proved to be only a temporary drag on economic growth, followed by rapid recovery.
Later
1500h : EUR - Trade Balance
1900h : EUR - German Industrial Production
Wednesday, January 03, 2007
Fund Performance per day (inception date : 4 Dec 06) : 0.99452%
Yesterday
USD (Bullish) - The Federal Reserve thinks that some inflation risks do remain. It would be a shock to investors if the next move in short-term rates turned out to be up instead of down. At the moment, investors remain focused on the risk of weakness in housing activity cutting directly into economic growth, as well as the danger it poses to consumer spending. Interest rate futures are pricing in almost two quarter-point cuts by the Fed this year. But there is a different scenario. Imagine if the housing market's dramatic slowdown were to level off, as it did in the UK, and then show signs of renewed strength. But if consumer spending in general holds up, the rest of the economy continues to chug along, and the US benefits from strong growth elsewhere in the world, things could look rosier further into the year. While the most likely direction for rates is still down, it remains possible that 2007 will not bring the looser monetary policy some investors are banking on.
EUR (Bullish) Europe's manufacturing sector steamed into 2007 with strong growth amid buoyant global demand, according to a closely watched survey of purchasing managers released Tuesday that also highlighted growing divergences between Germany and France, the two largest economies in the 13-nation euro zone. Makers of everything from trucks to machine tools to chemicals reported that activity during December kept up the strong pace that emerged around mid-2006. German manufacturers have been profiting for years now from a strong global expansion, but in recent months they have also seen the awakening of long-dormant consumers. Unemployment fell below four million, to 9.6 percent, in November, giving people more money to spend on consumer goods like cars and appliances, and is likely to sink another notch when new figures are reported on Wednesday…The euro zone is beginning the year with strength, economists believe.
Today
USD (bullish) - Federal Reserve Board Chairman Ben Bernanke and his colleagues on the Federal Open Market Committee continued to view the current rates of core inflation as 'uncomfortably high' at their meeting last month and pledged to watch incoming economic data closely before making a decision about interest rates scheduled to take place at the end of this month. 'Members agreed that the statement should continue to convey that inflation risks remained of greatest concern and that additional policy firming was possible,' the Fed said, according to the minutes of the Dec 12 meeting, released today. Nearly all FOMC members thought the slowdown in the housing market was likely to lower economic growth in the near term, though the negative effects would likely dissipate over time.
Later
1445h : CHF - CPI
1655h : EUR - German PMI
1700h : EUR - Euro-zone PMI
1730h : GBP - M4 Money Supply / PMI
1800h : EUR - CPI Estimates
1830h : GBP - Gfk Consumer Confidence
Yesterday
USD (Bullish) - The Federal Reserve thinks that some inflation risks do remain. It would be a shock to investors if the next move in short-term rates turned out to be up instead of down. At the moment, investors remain focused on the risk of weakness in housing activity cutting directly into economic growth, as well as the danger it poses to consumer spending. Interest rate futures are pricing in almost two quarter-point cuts by the Fed this year. But there is a different scenario. Imagine if the housing market's dramatic slowdown were to level off, as it did in the UK, and then show signs of renewed strength. But if consumer spending in general holds up, the rest of the economy continues to chug along, and the US benefits from strong growth elsewhere in the world, things could look rosier further into the year. While the most likely direction for rates is still down, it remains possible that 2007 will not bring the looser monetary policy some investors are banking on.
EUR (Bullish) Europe's manufacturing sector steamed into 2007 with strong growth amid buoyant global demand, according to a closely watched survey of purchasing managers released Tuesday that also highlighted growing divergences between Germany and France, the two largest economies in the 13-nation euro zone. Makers of everything from trucks to machine tools to chemicals reported that activity during December kept up the strong pace that emerged around mid-2006. German manufacturers have been profiting for years now from a strong global expansion, but in recent months they have also seen the awakening of long-dormant consumers. Unemployment fell below four million, to 9.6 percent, in November, giving people more money to spend on consumer goods like cars and appliances, and is likely to sink another notch when new figures are reported on Wednesday…The euro zone is beginning the year with strength, economists believe.
Today
USD (bullish) - Federal Reserve Board Chairman Ben Bernanke and his colleagues on the Federal Open Market Committee continued to view the current rates of core inflation as 'uncomfortably high' at their meeting last month and pledged to watch incoming economic data closely before making a decision about interest rates scheduled to take place at the end of this month. 'Members agreed that the statement should continue to convey that inflation risks remained of greatest concern and that additional policy firming was possible,' the Fed said, according to the minutes of the Dec 12 meeting, released today. Nearly all FOMC members thought the slowdown in the housing market was likely to lower economic growth in the near term, though the negative effects would likely dissipate over time.
Later
1445h : CHF - CPI
1655h : EUR - German PMI
1700h : EUR - Euro-zone PMI
1730h : GBP - M4 Money Supply / PMI
1800h : EUR - CPI Estimates
1830h : GBP - Gfk Consumer Confidence
Fund Performance per day (inception date : 4 Dec 06) : 1.0437%
Today
USD ( Neutral) : The US dollar was slightly softer in afternoon trade here, probably because Japan is having a holiday. USD is struggling to find support as investors chase higher yielding currencies such as the Australian and New Zealand currencies. Markets will probably be quiet until Friday's non farm payroll figures.
AUD / NZD (Bullish) : Markets are expecting the Reserve Bank of Australia will hike interest rates by 25 basis points next month to 6.50 pct. Trading in 30-day interest rate futures contracts shows bets have doubled in the past month that the RBA will raise its official cash rate next month. The New Zealand dollar meanwhile is being supported by expectations the Reserve Bank of New Zealand will raise it's official cash rate by 25 basis points this month to 7.50 pct.
JPY (Neutral) : Excerpts of BoJ Deputy Gov Toshiro Mutoh interview indicates the BoJ might still raise rates in January. On FX, JPY could be a touch supported by the ongoing debate about January rate hikes
Later
USD (Might turn bullish) : Look out for the ISM Manufacturing and Non Farm Payrolls. Figures might turn out to be more bullish than expected. Both might point to potential dollar strength towards the end of the week.
1655h - EUR : IFO Unemployment Change / IFO Unemployment Rate
2300h - USD : Construction spending / ISM Manufacturing
0645h - NZD : Exports / Imports
Technicals
Markets range bound, Pace of the markets should pick up from tomorrow onwards.
Today
USD ( Neutral) : The US dollar was slightly softer in afternoon trade here, probably because Japan is having a holiday. USD is struggling to find support as investors chase higher yielding currencies such as the Australian and New Zealand currencies. Markets will probably be quiet until Friday's non farm payroll figures.
AUD / NZD (Bullish) : Markets are expecting the Reserve Bank of Australia will hike interest rates by 25 basis points next month to 6.50 pct. Trading in 30-day interest rate futures contracts shows bets have doubled in the past month that the RBA will raise its official cash rate next month. The New Zealand dollar meanwhile is being supported by expectations the Reserve Bank of New Zealand will raise it's official cash rate by 25 basis points this month to 7.50 pct.
JPY (Neutral) : Excerpts of BoJ Deputy Gov Toshiro Mutoh interview indicates the BoJ might still raise rates in January. On FX, JPY could be a touch supported by the ongoing debate about January rate hikes
Later
USD (Might turn bullish) : Look out for the ISM Manufacturing and Non Farm Payrolls. Figures might turn out to be more bullish than expected. Both might point to potential dollar strength towards the end of the week.
1655h - EUR : IFO Unemployment Change / IFO Unemployment Rate
2300h - USD : Construction spending / ISM Manufacturing
0645h - NZD : Exports / Imports
Technicals
Markets range bound, Pace of the markets should pick up from tomorrow onwards.
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