{"id":3100,"date":"2009-07-28T10:42:50","date_gmt":"2009-07-28T15:42:50","guid":{"rendered":"http:\/\/countingpips.com\/fx\/?p=3100"},"modified":"2009-07-28T10:42:50","modified_gmt":"2009-07-28T15:42:50","slug":"fundamental-outlook-at-1400-gmt-edt-0400-62","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/fx\/2009\/07\/28\/fundamental-outlook-at-1400-gmt-edt-0400-62\/","title":{"rendered":"Fundamental Outlook at 1400 GMT (EDT + 0400)"},"content":{"rendered":"

By GCI Fx Research<\/strong><\/p>\n

\u20ac<\/strong><\/p>\n

The euro appreciated modestly vis-\u00e0-vis the U.S. dollar today as the single currency tested offers around the US$ 1.4305 level and was supported around the $1.4220 level.\u00a0 Traders are awaiting the release of Q2 U.S. gross domestic product data on Friday and next week\u2019s July non-farm payrolls report.\u00a0 Recent U.S. economic data \u2013 including housing data \u2013 have been on the upswing and dealers are curious to determine if the improving U.S. data are coincident with a U.S. labour market that has already bottomed out.\u00a0 Data released in the U.S. today saw the May S&P\/ Case-Shiller home price index was off 17.06% y\/y, an improvement from the revised April print of -18.10%.\u00a0 Also, July consumer confidence fell to 46.6 from 49.3 in June while the the July Richmond Fed manufacturing index printed at 14, up from 6 in June.\u00a0 Another indication that the global credit crunch continues to thaw is a narrowing of the LIBOR-OIS spread, a measure of banks\u2019 reluctance to lend.\u00a0 The spread fell below 30 bps for the first time in eighteen months and is now at its lowest level since January 2003, far below the 364 bps level from 10 October 2008 when Lehman Brothers was failing as a viable financial institution.\u00a0 Effectively, the spread measures the premium banks charge over what traders are predicting the Federal Reserve\u2019s effective federal funds rate will average over the following three months.\u00a0 Prior to the beginning of the credit crunch in August 2007, the spread average about 11 bps in the five years leading up to the credit market dislocations.\u00a0 In eurozone news, the Centre for Economic Policy Research and Bank of Italy released their EuroCoin indicator today and it improved for the fifth consecutive month, lifting to -0.42 in July \u2013 the highest level since August.\u00a0 These data evidence an improvement in industrial production.\u00a0 CEPR also reported the economic recession bottomed out in the first quarter of the year when GD was off 2.5% q\/q and 4.8% y\/y.\u00a0 Notably, EMU-16 industrial production was up 0.5% m\/m in May, the first improvement since August 2008, while the annual measure fell 17.0%, the smallest pullback since January 2009.\u00a0 Euro bids are cited around the US$ 1.3900 figure.
\n
\n\u00a5\/ CNY<\/strong><\/p>\n

The yen appreciated vis-\u00e0-vis the U.S. dollar today as the greenback tested bids around the \u00a594.40 level and was capped around the \u00a595.25 level.\u00a0 The U.S. dollar onslaught continued as the greenback fell to its lowest level this year relative to six major currencies.\u00a0 The yen has also been on the defensive recently as improving equity markets have directed investment capital out of Japan and into higher-yielding international assets.\u00a0 The yen, however, shook off equities-supportive news that Deutsche Bank\u2019s net income rose to \u20ac1.09 billion from \u20ac649 million one year ago.\u00a0 Japanese exporters have been repatriating overseas assets recently as the yen has declined and the end of the month is near.\u00a0 The Nikkei 225 stock index lost 0.01% to close at \u00a510,087.26.\u00a0 U.S. dollar offers are cited around the \u00a5104.15 level.\u00a0 The euro moved lower vis-\u00e0-vis the yen as the single currency tested bids around the \u00a5134.30 level and was capped around the \u00a5135.95 level.\u00a0 The British pound moved lower vis-\u00e0-vis the yen as sterling tested bids around the \u00a5155.60 level while the Swiss franc moved lower vis-\u00e0-vis the yen and tested bids around the \u00a588.20 level. In Chinese news, the U.S. dollar gained ground vis-\u00e0-vis the Chinese yuan as the greenback closed at CNY 6.8315 in the over-the-counter market, up from CNY 6.8283.\u00a0 The Chinese government yesterday called on the U.S. government to maintain a stable value of the U.S. dollar to protect China\u2019s massive holdings of U.S. government bonds.\u00a0 Chinese finance minister Zhu reported \u201cThe Chinese government is responsible, and our responsibility is to the Chinese people. Of course, we are concerned about the safety of dollar assets.\u201d People\u2019s Bank of China today reported consumer prices are starting to stabilize and added inflation could reach bottom by the end of this quarter, also noting that economic growth was stronger in the second quarter than expected at an annualized 14.9% rate.<\/p>\n

\u20a4<\/strong><\/p>\n

The British pound climbed marginally vis-\u00e0-vis the U.S. dollar today as cable tested offers around the US$ 1.6555 level and was supported around the $1.6455 level.\u00a0 Positive data were released by CBI today that noted the July monthly distributive trades retail sales balance improved to -15 from -17 in June.\u00a0 These data could suggest the worst of the retail slump has passed in the U.K. although economists note final private demand remains weak.\u00a0 Cable bids are cited around the US$ 1.6260 level.\u00a0 The euro moved lower vis-\u00e0-vis the British pound as the single currency tested bids around the \u20a40.8620 level and was capped around the \u20a40.8645 level.
\n
\nCHF<\/strong><\/p>\n

The Swiss franc appreciated vis-\u00e0-vis the U.S. dollar today as the greenback tested bids around the CHF 1.0655 level and was capped around the CHF 1.0715 level.\u00a0 Data released in Switzerland today saw the June UBS consumption indicator improve to 0.96 in June from a revised 0.75 in May.\u00a0 These data suggest final private demand is improving despite rising unemployment. Recent data have revealed manufacturing weakened at its slowest pace in eight months in June and leading economic indicators recently improved for the second consecutive month.\u00a0 Germany is also benefiting from an improvement in German business confidence that reached a nine-month high this month.\u00a0 U.S. dollar offers are cited around the CHF 1.0910 level.\u00a0 The euro came off vis-\u00e0-vis the Swiss franc as the common currency tested bids around the CHF 1.5220 level while the British pound fell vis-\u00e0-vis the Swiss franc as sterling tested bids around the CHF 1.7600 figure.<\/p>\n

Daily Market Commentary<\/strong><\/em> provided by\u00a0GCI Financial Ltd<\/strong><\/a>.<\/strong><\/p>\n

GCI Financial Ltd (\u201dGCI\u201d) is a regulated securities and commodities trading firm, specializing in online Foreign Exchange (\u201dForex\u201d) brokerage. GCI executes billions of dollars per month in foreign exchange transactions alone. In addition to Forex, GCI is a primary market maker in Contracts for Difference (\u201dCFDs\u201d) on shares, indices and futures, and offers one of the fastest growing online CFD trading services. GCI has over 10,000 clients worldwide, including individual traders, institutions, and money managers. GCI provides an advanced, secure, and comprehensive online trading system. Client funds are insured and held in a separate customer account. In addition, GCI Financial Ltd maintains Net Capital in excess of minimum regulatory requirements.<\/p>\n

DISCLAIMER: GCI\u2019s Daily Market Commentary is provided for informational purposes only. The information contained in these reports is gathered from reputable news sources and is not intended to be U.S.ed as investment advice. GCI assumes no responsibility or liability from gains or losses incurred by the information herein contained.<\/p>\n","protected":false},"excerpt":{"rendered":"

By GCI Financial – The euro appreciated modestly vis-\u00e0-vis the U.S. dollar today as the single currency tested offers around the US$ 1.4305 level…<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-3100","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/3100","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/comments?post=3100"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/3100\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/media?parent=3100"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/categories?post=3100"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/tags?post=3100"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}