Morning Briefing
The Morning Briefing is prepared daily at the start of the European Trading session by RTFX’s trading desk. It presents a roundup of the major news headlines occurring within the global economy that may affect the forex market. This news bulletin also includes a view of our forex calendar for the day, highs and lows achieved in the previous sessions from the forex market, global indices and commodities and brief commentary about the economic headlines.
Morning Briefing for Monday, 20 Feb 2012 (Updated 09:54:07 CET)Greece again, again… EU Ministers Aiming for Solution Today.
What’s new:
Asia: The PBoC cut the reserve requirement ratio 50bp, effective by February 24th , triggering a boost in risk appetite. Japanese trade figures in line with expectations. USD/JPY capped just before the 80.0-figure. AUD/USD briefly above 1.08. The MSCI Asia-Pacific equity index has risen for the past nine weeks in a row.
US: No big surprise in US CPI.
Europe: Strong UK retail sales boosted the GBP.
Forex rates in Asia and Indices:
EUR/USD: 1.3237 - 1.3190.
USD/CHF: 0.9164 – 0.9138.
GBP/USD: 1.5879 - 1.5844.
EUR/JPY: 105.75 – 104.77.
USD/JPY: 79.88 – 79.42.
DowJones: 12’949.87 +0.35%
NASDAQ: 2'951.787 -0.27%
S & P 500: 1'361.23 +0.23%
Nikkei: 9’485.09 +1.08%
Shanghai: 2'363.60 +0.27%
Gold: $ 1'734.90
Crude Oil: $ 104.84
Comments:
FX majors were pretty subdued on Friday as the markets awaited news on the EU/Greek-front after postponements of the meeting among the EU Finance ministers to discuss and approve the €130 billion bailout package for the Greek economy. US CPI figures for the month of January fell short of expectations on the monthly figure, coming out at 0.2% vs. 0.3% expected. The yearly figure surprised to the upside at 2.9% vs. 2.8% expected.
From the UK, the January retail sales surprised the market positively, coming out at 0.9% - more and a percentage point above expectations and only the second consecutive time in eight years that we have seen an increase in both the December and January figure. It should be noted that the figure is quite volatile, but GBP/USD took home its third consecutive daily gain and eyes resistance at the bear trend from late October, coming in at the 1.59-figure before the 200-day moving average at 1.5922. Further upside confirmed with a close above 1.5929. 100-day moving average at 1.5689 acts as support.
Today’s session is focused at the meeting among the EU finance ministers and no important macro figures or key bond auctions are scheduled. Liquidity is expected to be lower than average due to market holiday in the US (Washington’s birthday), but market participants will weigh the outcome where the ministers have announced that they will take all the necessary decisions. If the outcome is positive, we could see risk picking up temporarily before the Greek PSI deal, expected to take place on Wednesday. This should be enough for Greece to overcome the refinancing operations in March, but it is not over for Greece yet. An upcoming election and a negative growth rate of 7% are weighing heavily on the future of the country.
EUR/USD reversed on Thursday and closed above the 21-day moving average for the first time since January 19th and has made a high in today’s trading session at 1.3237 – just before the 38.2% Fibonacci-retracement in the 1.4247-1.2625-wave. Bullish sentiment improved at a close above the 100-day moving average coinciding with the February highs at 1.3321, which opens up for a test of next Fibonacci-retracement at 1.3434. Support at 1.3155 before last week’s low at 1.2975.
Have a nice day!
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