CFD Markets News and Forecasts — 08-09-2011

Continues to see back and forth chop but the direction remains unchanged; lower lows. Pair has eased to $1.3885 area before covering slightly as some book quick profits. Euro last at $1.3900.

Bernanke's speech is a bust on specifics, says Fed "will certainly do all that it can to help restore high rates of growth and employment in a context of price stability" but gives no clues on how and does not even reiterate or rank remaining tools. Say recovery is not robust and unemployment remains high, calls economy slow and erratic; H2 to pick up but inflation to moderate. Says Fed still has "range" of tools/options, and "My FOMC colleagues and I will continue to consider 
those and other pertinent issues, including, of course, economic and financial developments, at our meeting in September and are prepared to 
employ these tools as appropriate to promote a stronger economic recovery in a context of price stability."

Investors waited for President Barack Obama and Federal Reserve Chairman Ben S. Bernanke to discuss the economy.

The pair fell to fresh lows for the day around $1.3940 and likely to see further selling on the London close as some adjust portfolios. Bids to cushion from $1.3930 to $1.3900.

Financials were a source of leadership yesterday, when the sector surged almost 5%, but today the group is grappling with some selling pressure that took the sector to an early loss of more than 1%. The sector has since cut that loss in half, but it is still one of the worst performing sectors of early trade. Insurance issues AIG (AIG 25.03, -0.36) and Hartford Financial (HIG 17.66, -0.17) and regional banking plays PNC Financial (PNC 48.51, -0.57) and Comerica (CMA 23.27, -0.27) are in the worst shape.

• Will not dramatize situation of banks as some have

U.S. stocks were headed for a slightly lower open Thursday, following separate reports showing the U.S. trade gap narrowed in July and jobless claims rose more than expected in the latest week.
Investors remain on edge ahead of President Obama's highly anticipated jobs speech Thursday evening.
Europe is a continued point of concern for investors who are also focusing on the U.S. economy and jobs. Just last week, the government released a dismal jobs report that showed zero growth, bolstering concern for the overall economy.
Stocks are coming off of sharp gains Wednesday, following a three-day rout.
Economy: Filings for first-time unemployment benefits rose 2,000 to 414,000 in the week ending Sept. 2, the Labor Department reported Thursday. That was up from the 409,000 claims filed the week before, and worse than the 400,000 claims economists surveyed by Briefing.com had expected.
The U.S. trade gap narrowed to $44.8 billion in July, led by a surge in exports. Trade balance figures were expected to show the deficit widened to $51.5 billion in July from $53.1 billion in June.
Once the stock market opens, investors will be monitoring a speech from Federal Reserve Chairman Ben Bernanke at 17:30 GMT. Fed watchers are looking for any hints that the central bank is considering further stimulus measures, beyond its latest pledge to keep interest rates low until mid 2013.
After the market closes, President Obama will wrap up the busy day with a speech on job creation at 23:00 GMT.  He is expected to propose roughly $300 billion in stimulus measures to get job creation back on track.
On the European front, the Bank of England voted to leave interest rates. unchanged at 0.5%.
The European Central Bank also opted to keep its key interest rate unchanged at 1.5%.The ECB last raised its rates in July to combat rising inflation, but economists had expected the central bank to put its rate hikes on hold, due to weak economic growth in the region.
Investors will be monitoring ECB president Jean-Claude Trichet's latest assessment on Europe's economy.
Companies: AOL (AOL) will be in the spotlight as the AOL-TechCrunch fiasco continues. Inside sources say TechCrunch's founder Michael Arrington will be fired, after news broke of his new venture -- CrunchFund.
World markets:

Oil for October delivery slipped 5 cents to $89.29 a barrel.
Gold futures for December delivery rose $15.90 to $1,833.50 an ounce.
Bonds: The price on the benchmark 10-year U.S. Treasury fell, pushing the yield up to 2.04% from 2.02% late Wednesday.

The rate lurched through the trend support around $1.3980/70 area and that level now to provide some resistance on the rebound while downside focus shifts to $1.3925 where an option barrier strike is seen,
and likely to have some related bids around $1.3950. Further bids at $1.3900/10.

• Today we see downside risks to growth;
  
• Last month we saw upside infl risks, today balanced.

• Very clsoely watching all data is warranted;
  
• Inflation expectations must remain anchored:
  
• Will monitor all developments very closely

• sees 2012 GDP 0.4% to 2.2%, Jun forecast 0.6% to 2.8%

• Liquidity ample;
  
• Growth has decelerated in 2q, as expected;
  
• EMU to grow moderately ahead,uncertainty high;
  
• Intensified downside growth risks;
  
• Int rates low, monpol accommodative;
  
• Must ensure recent price devels don't cause infl press

EUR/USD
Offers: $1.4100/10, $1.4120/25, $1.4150
Bids: $1.4025/00, $1.3990, $1.3970, $1.3950, $1.3910/00

Data released:
01:30    Australia Employment Change s.a. (Aug)     -9.7    10.0K    -0.1K    3    
01:30    Australia Unemployment Rate s.a. (Aug)     5.3%    5.1%    5.1%
06:00     Germany     Current account (July) unadjusted, bln    7.5    9.5    11.5 (11.9)
06:00     Germany     Trade balance (July) unadjusted, bln    10.4    11.0    12.7
11:00     UK     BoE meeting announcement    0.50%    0.50%    0.50%
11:45     EU(17)     ECB meeting announcement    1.50%    1.50%    1.50%

The dollar strengthened versus the euro and yen before President Barack Obama unveils proposals to spur job growth and the U.S. economy, making it less likely that the Federal Reserve will add to monetary easing.
The greenback snapped yesterday’s losses versus the yen and the euro on prospects Obama’s plans will boost growth.
“To announce a broad program to fight unemployment is always something that might be perceived as dollar-positive by the market,” said Lutz Karpowitz, a senior currency strategist at Commerzbank AG in Frankfurt.
Obama, facing re-election in 2012, will address a joint session of Congress today on proposals to speed job creation that may inject more than $300 billion into the economy next year. Almost half the stimulus may come from tax cuts, including an extension of a 2 percentage-point reduction in the payroll tax paid by workers due to expire Dec. 31 and a new decrease in the portion of the tax paid by employers.
Euro eased against itsmain rivals on speculation European Central Bank President Jean-Claude Trichet will signal a less aggressive stance toward inflation. ECB: Leaves rates unchanged at 1.50%, as expected
Demand for the euro was limited on speculation the ECB will lower inflation and growth forecasts and signal a pause in interest-rate increases at today’s meeting in Frankfurt.
“The situation surrounding the euro hasn’t changed at all,” said Masahide Tanaka, a senior strategist in Tokyo at Mizuho Trust & Banking Co., a unit of Japan’s third-largest bank by market value. “If Trichet downgrades his inflation outlook, the market will price in a halt in interest-rate increases, weighing on the euro.”
The Swiss franc weakened against the euro for a third day as global stocks rose. The pound rose against most of its peers as the Bank of England kept its main rate at a record low 0.50%.

EUR/USD trade near the session lows $1.4035.
GBP/USD tested $1.6040/50 bafore eased back to $1.6010. Support remains around $1.5915/00, ahead of $1.5780.
USD/JPY fell from Y77.42 to Y77.15.

The main event of the day is Trichet press-conference due at 12:30 GMT. Also at 12:30 GMT Canada's and US Trade Balances are due to come.

Extends its corrective pullback, as rate eases on to stg0.8760, having seen highs earlier in the day of stg0.8845. BOE MPC leaving rate and QE unchanged has prompted sterling inflows (some positioning seen ahead of the decision on suggestion of a possible QE increase). Support seen at stg0.8755/45 ahead of stg0.8735/30.

Cable jumps above $1.6000, from around $1.5975 as the BOE MPC leave rate and QE size unchanged, with rate again seen meeting resistance at the $1.6010 level). Rate holds firm, currently around $1.6000. Stops noted above $1.6020, which if triggered to open a move toward $1.6040/50. Support remains around $1.5915/00, ahead of $1.5780.

Oil continues to range although with a slight bullish bias. Daily studies also suggest a bullish trend, however momentum looks to be stalling while stochastic study is in sell-mode. Long-term, oil is bearish since breaking the Feb 2009 support line, now resistance at $94.43. ahead of the stronger one seen around $90.55/65 and $91.10/25. Initial support seen at $88.15, the 50% Fibo of $100.62/75.70.

Still expect robust growth in Germany;
Need income tax cuts in Germany

Data released:
01:30    Australia Employment Change s.a. (Aug)     -9.7    10.0K    -0.1K    3    
01:30    Australia Unemployment Rate s.a. (Aug)     5.3%    5.1%    5.1%

The dollar strengthened before President Barack Obama unveils proposals to spur job growth and the U.S. economy.
“To announce a broad program to fight unemployment is always something that might be perceived as dollar positive by the market,” said Lutz Karpowitz, a senior currency strategist at Commerzbank AG.
Obama, facing re-election in 2012, will address a joint session of Congress today on proposals to speed job creation that may inject more than $300 billion into the economy next year.
San Francisco Fed President John C. Williams yesterday cut his growth forecast for the rest of 2011 and said the economy probably won’t be able to expand enough to bring down a 9.1% jobless rate soon.
The U.S. economy grew at a 1% annual rate in the second quarter, and unemployment remained stuck at 9.1% in August as job growth stagnated. Confidence among consumers plunged last month to the lowest level in more than two years.
Demand for the euro was limited on speculation the ECB will lower inflation and growth forecasts and signal a pause in interest-rate increases at today’s meeting in Frankfurt.
“The situation surrounding the euro hasn’t changed at all,” said Masahide Tanaka, a senior strategist at Mizuho Trust & Banking Co. “If Trichet downgrades his inflation outlook, the market will price in a halt in interest-rate increases, weighing on the euro.”
The Australian dollar trimmed yesterday’s 1.7% surge against its U.S. counterpart after the statistics bureau said that employers unexpectedly shed jobs for a second consecutive month in August. The number of people employed fell by 9,700, compared with the median estimate for a 10,000 increase. The jobless rate climbed to 5.3%, the highest since October, from 5.1% in July.

EUR/USD printed lows on $1.4050 before set stable between the $1.4060/90 range.
GBP/USD tested $1.5920 before recovered to $1.5942.
USD/JPY fell from Y77.42 to Y77.29.

The main events of the day - rate decisions from BoE and ECB at 11:00 GMT and 11:45 GMT respectively.
At 12:30 GMT Canada's and US Trade Balances are due to come.

EUR/USD: $1.3900, $1.4100, $1.4185, $1.4195, $1.4200, $1.4225
USD/JPY: Y76.50, Y76.80, Y77.00, Y77.15, Y77.20, Y77.25, Y77.50, Y77.65
EUR/JPY: Y108.30, Y108.50, Y111.00
GBP/USD: $1.6150-55, $1.6375
EUR/GBP: stg0.8810
AUD/USD: $1.0525, $1.0580, $1.0610, $1.0620, $1.0650

EUR/USD
Offers: $1.4100, $1.4125

GBP/USD
Bids: $1.5936, $1.5920, $1.5906/00

USD/JPY
Offers: Y77.50
Bids:  Y77.10

AUD/USD
Offers: $1.0620

EUR/GBP
Offers: stg0.8830, stg0.8850/55
Bids: stg0.8805/00

Majors close

Japan’s Nikkei 225 (NKY) Stock Average rose the most in five months after the nation’s currency fell to a four-week low versus the dollar and the government pledged to ask Group of Seven officials to support a weaker yen.
Honda Motor Co. rose 1.6%. Shippers gained after Credit Suisse Group AG started coverage of the maritime traffic sector with an “overweight” rating.
Japan Tobacco Inc. (2914) rose 3.5% after the world’s fourth-biggest cigarette maker asked the government to sell its shares in the company and use the funds to pay for disaster relief efforts.
Stocks extended gains even after the yen pared yesterday’s losses and the Bank of Japan today kept its key interest rate between zero and 0.1% and left the amount of its lending and asset-purchase programs unchanged.
Exporters advanced, with Honda gaining 1.6%.
Canon Inc. (7751) climbed 1.5%.

European stocks rose the most in three weeks, rebounding from a two-year low, after three days of losses dragged the Stoxx Europe 600 Index near to the cheapest since 2008.
Greek stocks gained as Germany’s top court rejected challenges to the participation of Europe’s largest economy in euro rescue funds.
Cie. Financiere Richemont SA, climbed 7.3% after revenue topped analyst estimates.
Scor SE (SCR) increased 2.5% after confirming targets.
Renault SA (RNO) led a rally in automakers.
Greek banks rallied, led by National Bank of Greece SA (ETE), the country’s largest, which gained 23%.
EFG Eurobank Ergasias SA (EUROB) soared 15% and Piraeus Bank SA (TPEIR) jumped 15%.
The Federal Constitutional Court in Karlsruhe threw out suits targeting Germany’s share of the 110 billion euros ($155 billion) in loans for Greece from euro-region governments and the International Monetary Fund as well as a separate 750 billion-euro rescue fund approved last year to halt the spread of Greece’s debt crisis.

U.S. stocks advanced, snapping a three-day decline for the Standard & Poor’s 500 Index, as investors speculated President Barack Obama’s plan to inject more than $300 billion into the economy will bolster growth.
All 10 groups in the S&P 500 rose as gains were led by financial, energy and industrial shares.
Bank of America Corp. (BAC) added 7% after a shakeup in management.
Yahoo! Inc. climbed 6.1% as the most-visited U.S. Web portal ousted Chief Executive Officer Carol Bartz and announced a strategic review to boost growth.
Nvidia Corp. (NVDA) rose 9.6% as the maker of graphics chips forecast sales that beat estimates.
Obama plans to propose sparking job growth by injecting more than $300 billion into the economy next year, mostly through tax cuts, infrastructure spending and direct aid to state and local governments
The Fed said the economy grew at a slower pace in some regions of the country as shoppers limited their spending and factories curbed production. “Economic activity continued to expand at a modest pace, though some districts noted mixed or weakening activity,” the Fed said in its Beige Book survey released today in Washington.
Federal Reserve Bank of Chicago President Charles Evans called for more stimulus to reduce a 9.1% jobless rate, including a commitment to keep interest rates low until unemployment falls to around 7.5% while holding medium- term inflation below 3%.

Data released:
03:30     Japan     BoJ meeting announcement    0.00-0.10%    0.00-0.10%    0.00-0.10%
05:00     Japan     Leading indicators composite index (July) preliminary    106.0    105.9    103.2
05:00     Japan     Coincident indicators composite index (July) preliminary    109.0    -    108.8
07:00     UK     Halifax house price index (July)    -1.2%    -    0.3%
07:00     UK     Halifax house price index (July) 3m Y/Y    -2.6%    -    -2.3%
08:30     UK     Industrial production (July)    -0.2%    0.0%    0.0%
08:30     UK     Industrial production (July) Y/Y    -0.7%    -0.6%    -0.3%
08:30     UK     Manufacturing output (July)    0.1%    0.0%    -0.4%
08:30     UK     Manufacturing output (July) Y/Y    1.9%    1.9%    2.1%
10:00     Germany     Industrial production (July) seasonally adjusted    4.0%    0.5%    -1.0 (-1.1)%
10:00     Germany     Industrial production (July) not seasonally adjusted, workday adjusted Y/Y    10.1%    6.7%    6.7%
13:00     Canada     BOC meeting announcement    1.00%    1.00%    1.00%
18:00     USA     Fed Beige book              
23:50     Japan     Machinery orders core (July) adjusted    -8.2%    -4.2%    7.7%
23:50     Japan     Machinery orders core (July) unadjusted Y/Y    4.0%    8.3%    17.9%
23:50     Japan     Current account (July) unadjusted, trln    0.990    1.176    0.527
23:50     Japan     Trade balance (July) unadjusted, trln    0.123    -    0.132

Australia’s dollar rose after a report showed the economy grew more than analysts forecast.
Second quarter GDP increased to 1.2% versus -0.9% on the previous quarter. The market anticipated an increase to only 1.0%. In year on year terms, GDP increased to 1.4% in Q2 from 1%. This development has cooled expectations of an interest rate cut. 

EUR/USD rose from $1.4000 to $1.4150 before retreated to $1.4010. Later rate managed to recover to $1.4110.
GBP/USD rose from $1.5940 to $1.6040 before back to $1.6012. Later rate fell to a news low at $1.5916.
USD/JPY initially fell from Y77.70 to Y77.10. Later rate was back to Y77.40, but failed to hold and weakened to Y77.15.

The main events of the day - rate decisions from BoE and ECB at 11:00 GMT and 11:45 GMT respectively.
At 12:30 GMT Canada's and US Trade Balances are due to come.

Resistance 2: Y78.50

Support 1:Y77.05/10

Resistance 2: Chf0.8800   

Resistance 2: Chf0.8700   
Resistance 1: Chf0.8630

Comments: Pound holds tight, but in general remains under pressure. Resistance remains at $1.5990 (23.6% of Tuesday's move). Break above will target Sep 01 low on $1.6060, then - at $1.6130 Sep 05 low. Support is near $1.5920 (Tuesday's low). Below there is a risk of declining to $1.5860 and $1.5780 (Jul 12 lows).

Support 3: $1.3840  
Comments: Rate consolidates with no major changes in tech. Strong support comes at $1.3970/90 (yesterday's lows, $1.4000 - trend line from Jun 07'2010). Break below widens losses to $1.3950 and then - to $1.3840 (Jul lows). Resistance is near $1.4110 (Wednesday's NY high). Above there is a chance to test $1.4160 (31.8% of Tuesday's fall). Further resistance comes at $1.4280 (Tuesday's high).

06:00     Germany     Current account (July) unadjusted, bln         9.5    11.9
06:00     Germany     Trade balance (July) unadjusted, bln         11.0    12.7
11:00     UK     BoE meeting announcement         0.50%    0.50%
11:45     EU(17)     ECB meeting announcement         1.50%    1.50%
12:30     EU(17)     ECB press conference               
12:30     USA     Jobless claims (week to 03.09)         435K    409K
12:30     USA     International trade (July), bln         -50.0    -53.1
12:30     USA     Export (July), bln         -    170.9
12:30     USA     Import (July), bln         -    223.9
19:00     USA     Consumer credit (July), bln         6.0    15.5
20:30     USA     M2 money supply (29.08), bln         -    +17.9
23:50     Japan     Real GDP (Q2) revised         -0.5%    -0.3%
23:50     Japan     Real GDP (Q2) revised Y/Y         -2.0%    -1.3%
23:50     Japan     (M2+CDs) money supply (August) Y/Y         2.9%    2.9%