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Wakeup Call on Forex Markets

A round of more of the same about to hit markets

Thu, Mar 27 2008, 08:09 GMT
by David Karsbøl

Saxo Bank

... Goldman and UBS have upped their estimates on total writedowns for the financial sector. Carry Trades and the USD look weak again.

Overnight News Bullets

• GE IFO – Business Climate (MAR) out at 104.8 vs. 103.5 expected vs. 104.1 prior.

• GE IFO – Current Assessment (MAR) out at 111.5 vs. 109.5 expected vs. 110.3 prior.

• GE IFO – Expectations (MAR) out at 98.4 vs. 97.8 expected vs. 98.2 prior.

• EC E-Z Current Account (JAN) out at -10.6B vs. -10.3B prior.

• EC Industrial Orders MoM/YoY out at 2.0%/7.3% vs. 0.2%/3.3% expected vs. -3.6%/2.1% prior.

• US Mortgage Applications (MAR) out at 48.1% vs. -2.9% prior.

• US Durable Goods Orders (FEB) out at -1.7% vs. 0.7% expected vs. -5.3% prior.

• US Durable Goods Orders Ex. Transp. (FEB) out at -2.6% vs. -0.3% expected vs. -1.6% prior.

• US New Home Sales (FEB) out at 590K vs. 578K expected vs. 588K prior.

• US New Home Sales MoM (FEB) out at -1.8% vs. -1.7% expected vs. -2.8% prior.

• US DOE U.S. Crude Oil Inventories (MAR) out at 88K vs. 1800K expected vs. 133K prior.

• NZ Trade Balance (FEB) out at 258.0K vs. 140.0K expected vs. -320.0K prior.

• NZ Current Account Balance (4Q) out at -3.410B vs. -3.500B expected vs. -5.174K prior.

• NZ Account Deficit-GDP Ratio (4Q) out at -7.9% vs. -8.0% expected vs. -8.3% prior.

• JN Foreign Buying Japan Bonds (MAR) out at JPY-2346.7B vs. JPY853.0B prior.

Markets

• FX: The USD is weakening again. EURUSD soon about to take out the prior high at 1.5904.

• Fixed Income: Treasuries and JGB’s being picked up, but Bunds still weakening. All in uptrends, though.

• Equities: All regions weak, but down less than a percent.

• Commodities: All higher on USD weakness and lower than expected Crude Oil inventories.

O/N Data Heat map:

Calendar

Today's Highlights:

This and Next Week’s Highlights:

What's going on?

• New estimates for total writedowns among the financials yesterday. Both Goldman and UBS upping their estimates. This makes us change our call for short-term consolidation.

• In stead, it looks like we will have a round of “more of the same” or consolidation in FX and stock markets. The USD and Carry Trades look quite weak and we think the JPY and CHF should continue to outperform, even if FX markets are just consolidating.

• Buy Bunds, they have some catching up to do vs. Treasuries and JGB’s. Use a stop below 116 and target 118.

• Precious metals might see some more buying interest after the sell-off last week. Especially if the USD continues lower.

FX

Counting on continued JPY strength

FX Trading Strategies

Published on  Thu, Mar 27 2008, 08:22 GMT

Archive

• Signs of Risk-Aversion Re-entering the Market
  Published On Fri, May 9 2008, 07:00 GMT
• Long-Term Turnaround in the USD
  Published On Thu, May 8 2008, 06:49 GMT
• Weekly US ABC Consumer Confidence hits 17-year low
  Published On Wed, May 7 2008, 06:57 GMT
• Crude Oil Making New, Fresh Highs
  Published On Tue, May 6 2008, 06:48 GMT
• Markets Set To Ease Into a New Week
  Published On Mon, May 5 2008, 07:18 GMT

[ View All ]

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