{"id":5492,"date":"2009-12-23T21:13:07","date_gmt":"2009-12-24T02:13:07","guid":{"rendered":"http:\/\/countingpips.com\/fx\/?p=5492"},"modified":"2009-12-23T21:13:07","modified_gmt":"2009-12-24T02:13:07","slug":"fundamental-outlook-at-1500-gmt-edt-0500","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/fx\/2009\/12\/23\/fundamental-outlook-at-1500-gmt-edt-0500\/","title":{"rendered":"Fundamental Outlook at 1500 GMT (EDT + 0500)"},"content":{"rendered":"

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

\u20ac<\/p>\n

The euro moved higher vis-\u00e0-vis the U.S. dollar today as the single currency tested offers around the US$ 1.4365 level and was supported around the $1.4235 level.\u00a0 Weaker-than-expected U.S. economic data today paved the way for a stronger common currency.\u00a0 First, MBA mortgage applications were off 10.7%, down from a prior reading of 0.3%.\u00a0 Second, November personal income notched its largest increase in six months but failed to meet estimates, printing at +0.4%, up from a revised +0.3% in October.\u00a0 November personal spending decelerated to +0.5% from a revised reading of +0.6% in October and the the final December University of Michigan consumer sentiment indicator slid back to 72.5 from 73.4.\u00a0 Other data saw November new home sales off 11.3% m\/m, a sharp reversal from the downwardly revised +1.8% reading in October.\u00a0 On an annualized basis, new home sales sank to 355,000 from a revised 400,000 in October.\u00a0 Other data saw the PCE deflator up 1.5% y\/y, a sharp increase from the 0.1% revised October reading. At the core level, PCE was up 0.0% m\/m and 1.4% y\/y.\u00a0 Federal Reserve Chairman Bernanke appears poised to be reappointed to his position by the entire Senate.\u00a0 The most likely scenario for monetary policy in 2010 is the gradual removal of the Fed\u2019s emergency liquidity programs and a possible marginal increase in the federal funds target rate in the second half of the year.\u00a0 In eurozone news, Moody\u2019s Investors Service downgraded Greece\u2019s sovereign debt rating yesterday, following recent moves by Fitch and Standard & Poor\u2019s. Bank of Greece today reported Greek banks are well-capitalized with capital adequacy levels much higher than the European average.\u00a0 Data released in the eurozone yesterday saw the December GfK consumer confidence survey decline to 3.3 in December from 3.7 in November.\u00a0 The European Central Bank is expected to keep monetary policy relatively steady for the next several months.\u00a0 Euro bids are cited around the US$ 1.3885 level.<\/p>\n

\u00a5\/ CNY<\/strong><\/p>\n

The yen appreciated vis-\u00e0-vis the U.S. dollar today as the greenback tested bids around the \u00a591.30 level and was capped around the \u00a591.85 level.\u00a0 Chartists are eyeing the \u00a592.85\/ \u00a593.15 levels as upside price objectives. Bank of Japan\u2019s newfound vigilance against deflation has pushed long-term rates to a 53-month low on speculation the central bank will not lift its unsecured overnight call rate target while consumer price deflation remains negative. The yield on five-year Japanese government bonds reached 0.425%, the lowest yield since July 2005.\u00a0 Bank of Japan Governor Shirakawa yesterday said economic policymaking should not be guided by short-term price movements.\u00a0 On Monday, Shirakawa reported the central bank will \u201cpersistently\u201d keep interest rates at \u201cvirtually zero\u201d per cent to combat deflation.\u00a0 Shirakawa pledged \u201cto supply ample liquidity and maintain stability within the financial system\u2026if it is deemed necessary to achieve that, we are always prepared to act swiftly and decisively.\u201d\u00a0 Last week, Shirakawa stepped up the verbal rhetoric noting the BoJ \u201cdoes not tolerate a year-on-year rate of change in the consumer price index equal to or below zero per cent.\u201d\u00a0\u00a0 Finance minister Fujii yesterday reiterated the government will cap its new debt issuance at \u00a544 trillion in the next fiscal year.\u00a0 This figure includes a \u00a52 trillion fund to support jobs that Prime Minister Hatoyama recently described.\u00a0 Final budget negotiations for the 2010 \u2013 2011 fiscal year are expected by the end of this week.\u00a0 Former finance ministry official Sakakibara warned the dollar could fall to \u00a580 and \u201ccause stock losses and enhance deflation.\u201d\u00a0 The government today reported the economy is \u201cpicking up\u201d and kept its economic assessment unchanged for the fifth consecutive month.\u00a0 Notably, the government reduced its assessment of capital spending.\u00a0 The Nikkei 225 stock index climbed 1.91% yesterday to close at \u00a510,378.03.\u00a0 U.S. dollar offers are cited around the \u00a594.75 level.\u00a0 The euro moved higher vis-\u00e0-vis the yen as the single currency tested offers around the \u00a5131.30 level and was supported around the \u00a5130.55 level.\u00a0 The British pound moved lower vis-\u00e0-vis the yen as sterling tested offers around the \u00a5145.75 level while the Swiss franc moved higher vis-\u00e0-vis the yen and tested offers around the \u00a588.25 level. In Chinese news, the U.S. dollar depreciated vis-\u00e0-vis the Chinese yuan as the greenback closed at CNY 6.8294 in the over-the-counter market, down from CNY 6.8295.\u00a0 People\u2019s Bank of China reaffirmed its plans to maintain a \u201cmoderately loose\u201d policy stance in 2010 and to restrict credit for industries that have excess capacity.\u00a0 China appears poised to register economic growth of 8% this year. Chinese lenders provided US$ 1.3 trillion in loans in the first eleven months of the year.\u00a0 Monetary policy adjustments are expected in 2010 to slow the pace of economic growth and inflationary pressures.\u00a0 People\u2019s Bank of China Governor Zhou yesterday reported reserve ratios are an important policymaking tool and there is widespread speculation the central bank will lift reserve requirements for banks when policy is tightened further.\u00a0\u00a0 People\u2019s Bank of China advisor Fan Gang yesterday said the U.S. dollar may decline in the \u201cvery long term\u201d and fluctuate in the short term. State Information Center member Zhu Baoliang reported \u201cthe yuan shouldn\u2019t move against the dollar next year.\u201d The Chinese government reported industrial output will have expanded 11% in 2009 when final data are tallied.\u00a0 A government think tank reported retail sales will likely expand 18.5% in 2010 with exports up 6% next year.<\/p>\n

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

The British pound appreciated vis-\u00e0-vis the U.S. dollar today as cable tested offers around the US$ 1.5990 level and was supported around the $1.5925 level.\u00a0 Sterling this week had traded at its lowest level since mid-October before U.S. dollar bulls booked some profits.\u00a0 BBA reported net mortgage lending by U.K. banks increased \u20a43.3 billion in November, up from a \u20a43.2 billion rise in October.\u00a0 Demand for consumer credit weakened last month as \u20a4300 million was repaid by borrowers, up from \u20a4200 million in October.\u00a0 BBA also reported that mortgage approvals rose to a two-year high of 44,713 in November.\u00a0 Minutes from Bank of England\u2019s 9-10 December Monetary Policy Committee meeting were released today in which policymakers unanimously voted to keep the BoE\u2019s asset purchase facility unchanged at \u20a4200 billion and its main Bank Rate unchanged at a record-low of 0.5%.\u00a0 Yesterday, Bank of England announced trading conditions in the secondary market remain \u201csomewhat restricted\u201d and noted it will move to expand liquidity in the first week of the year.\u00a0 Cable bids are cited around the US$ 1.5755 level.\u00a0 The euro moved higher vis-\u00e0-vis the British pound as cable tested offers around the \u20a40.8995 level and was supported around the \u20a40.8910 level.<\/p>\n

CHF<\/strong><\/p>\n

The Swiss franc appreciated sharply vis-\u00e0-vis the U.S. dollar today as the greenback tested bids around the CHF 1.0360 level and was capped around the CHF 1.0495 level.\u00a0\u00a0 There remains ongoing talk the Swiss National Bank is conducting franc-selling intervention.\u00a0 Swiss National Bank released its quarterly report on Monday and said it would be \u201cpremature\u201d to begin raising borrowing costs, noting there are \u201cdownside risks\u201d to the inflation outlook.\u201d\u00a0 Trying to provide a balanced outlook, however, SNB reported \u201cexpansionary monetary policy cannot be maintained indefinitely.\u201d On 10 December, SNB voted to keep its benchmark rate unchanged at 0.25% and noted it will end its corporate bond purchases as a first step to withdraw its emergency measures.\u00a0 On Monday, SNB reported it will \u201ccontinue to act decisively to prevent any excessive appreciation.\u201d\u00a0 U.S. dollar offers are cited around the CHF 1.0615 level.\u00a0 The euro moved lower vis-\u00e0-vis the Swiss franc as the single currency tested bids around the CHF 1.4875 level while the British pound depreciated vis-\u00e0-vis the Swiss franc and tested bids around the CHF 1.6535 level.<\/p>\n

Daily Market Commentary<\/strong><\/em> provided by<\/em><\/strong> GCI 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 moved higher vis-\u00e0-vis the U.S. dollar today as the single currency tested offers around the US$ 1.4365 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-5492","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/5492","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=5492"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/5492\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/media?parent=5492"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/categories?post=5492"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/tags?post=5492"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}