forex trading outlook today - Forex Trading tips today December 6 2011 ; Risk rally extended. Some positive news from Europe helped buoy a market expecting much from policy makers this week. The Italian Government will present to Parliament a set of austerity and growth measures worth around EUR30bn, including guaranteeing bank bond issuance as part of an EU agreement to bolster fi nancial system confi dence. In addition, the German and French leaders have apparently reached an agreement on a strategy for the Eurozone, including a revised treaty, automatic sanctions for fi scal off enders, starting the ESM permanent rescue mechanism in 2012 rather than 2013, and a future bailout blueprint (IMF standards). Details will be presented at the EU Summit this Friday. Eurobonds appeared to be off the agenda, but the market considered enough progress had been made to push the S&P500 1.6% higher currently. US 10yr treasury yields rose 7bp to 2.11%, currently at 2.09%. Eurozone peripherals rallied strongly, Italy -73bp to 5.95%, Spain -56bp and Portugal -57bp. Greece was the exception, up182bp to a fresh record of 32.40%.
The US dollar index is around 0.3% lower on the improved sentiment. EUR rose from 1.3400 to 1.3487 before settling around 1.3450. USD/JPY slipped from 78.07 to 77.72. AUD probed recent recent resistance, rising from 1.0203 to 1.0305 and outperforming the majors. NZD rose from 0.7762 to 0.7837. AUD/NZD displayed pro-risk behaviour, rising from 1.3110 to 1.3186.
Economic wrap
US ISM Non-manufacturing slipped to 52.0 from 52.9 in November versus market expectations of an increase to 53.9. The headline has slowed for three consecutive months and stands at the lowest level since January 2010. The slowdown was led by falls in the employment component to 48.9 (vs 53.3) and supplier deliveries to 50.0 (from 52.0). Activity and orders both increased.
Ahead of the EU Summit on the 9th of December, Angela Merkel and Nicolas Sarkozy set out their position following a pre-Summit meeting today. The key agreements reached between the two include the need for a new treaty which would specify debt limits enforced by automatic sanctions. The European Court of Justice would be allowed to monitor budget limits but would have no right to veto national budgets. The treaty change could be limited to the 17 Eurozone member states although incorporating the whole of the EU would be preferred. The aim is for an accord to be reached by March.
Eurozone November fi nal Services PMI was revised down to 47.0 from the previous estimate of 47.2. Despite the downward revision, it was the fi rst monthly increase in the survey since March. The downward revision was led by Germany which was revised down to 50.3 (from initial estimate of 51.4 and down from 50.6 in October). Encouragingly, the Italian services PMI recovered the previous month's 2 point fall, although remains well in contractionary territory. In the UK, the PMI posted an increase to 52.1 from 51.3.
Eurozone retail sales increased 0.4% in October following a 0.6% decline in September. In the year to October, retail sales were 0.4% lower.
This is a list of the major events (News) for Tuesday – December 6, 2011 that will move the markets around the globe.
All times are given in GMT.
Tuesday – 12/06/2011
* AUD – Cash Rate : at 3:30am
Short term interest rates are the paramount factor in currency valuation – traders look at most other indicators merely to predict how rates will change in the future.
Previous 4.50%, Forecast 4.25%
* AUD – RBA Rate Statement : at 3:30am
It’s among the primary tools the RBA Reserve Bank Board uses to communicate with investors about monetary policy. It contains the outcome of their decision on interest rates and commentary about the economic conditions that influenced their decision. Most importantly, it discusses the economic outlook and offers clues on the outcome of future decisions.
* CHF – Foreign Currency Reserves : at 8:00am
It’s Measures; Total value of international reserves and foreign currency liquidity.
Previous 242.7B, Forecast
* GBP – Halifax HPI : at 8:00am
It’s a leading indicator of the housing industry’s health because rising house prices attract investors and spur industry activity.
Previous 1.2%, Forecast
* CHF – Consumer Price Index (CPI) : at 8:15am
Consumer prices account for a majority of overall inflation. Inflation is important to currency valuation because rising prices lead the central bank to raise interest rates out of respect for their inflation containment mandate.
Previous -0.1%, Forecast 0.1%
* CAD – Building Permits : at 1:30pm
It’s an excellent gauge of future construction activity because obtaining a permit is among the first steps in constructing a new building.
Previous -4.9%, Forecast 2.3%
* CAD – BOC Rate Statement : at 2:00pm
It’s the primary tool the BOC uses to communicate with investors about monetary policy. It contains the outcome of their decision on interest rates and commentary about the economic conditions that influenced their decision. Most importantly, it discusses the economic outlook and offers clues on the outcome of future decisions.
* CAD – Overnight Rate : at 2:00pm
ForexFactory.com Notes; The rate decision is often priced in the market so it tends to be overshadowed by the BOC Rate Statement which is focused on the future.
Previous 1.00%, Forecast 1.00%
* CAD – Ivey PMI : at 3:00pm
It’s a leading indicator of economic health – businesses react quickly to market conditions, and their purchasing managers hold perhaps the most current and relevant insight into the company’s view of the economy.
The US dollar index is around 0.3% lower on the improved sentiment. EUR rose from 1.3400 to 1.3487 before settling around 1.3450. USD/JPY slipped from 78.07 to 77.72. AUD probed recent recent resistance, rising from 1.0203 to 1.0305 and outperforming the majors. NZD rose from 0.7762 to 0.7837. AUD/NZD displayed pro-risk behaviour, rising from 1.3110 to 1.3186.
Economic wrap
US ISM Non-manufacturing slipped to 52.0 from 52.9 in November versus market expectations of an increase to 53.9. The headline has slowed for three consecutive months and stands at the lowest level since January 2010. The slowdown was led by falls in the employment component to 48.9 (vs 53.3) and supplier deliveries to 50.0 (from 52.0). Activity and orders both increased.
Ahead of the EU Summit on the 9th of December, Angela Merkel and Nicolas Sarkozy set out their position following a pre-Summit meeting today. The key agreements reached between the two include the need for a new treaty which would specify debt limits enforced by automatic sanctions. The European Court of Justice would be allowed to monitor budget limits but would have no right to veto national budgets. The treaty change could be limited to the 17 Eurozone member states although incorporating the whole of the EU would be preferred. The aim is for an accord to be reached by March.
Eurozone November fi nal Services PMI was revised down to 47.0 from the previous estimate of 47.2. Despite the downward revision, it was the fi rst monthly increase in the survey since March. The downward revision was led by Germany which was revised down to 50.3 (from initial estimate of 51.4 and down from 50.6 in October). Encouragingly, the Italian services PMI recovered the previous month's 2 point fall, although remains well in contractionary territory. In the UK, the PMI posted an increase to 52.1 from 51.3.
Eurozone retail sales increased 0.4% in October following a 0.6% decline in September. In the year to October, retail sales were 0.4% lower.
This is a list of the major events (News) for Tuesday – December 6, 2011 that will move the markets around the globe.
All times are given in GMT.
Tuesday – 12/06/2011
* AUD – Cash Rate : at 3:30am
Short term interest rates are the paramount factor in currency valuation – traders look at most other indicators merely to predict how rates will change in the future.
Previous 4.50%, Forecast 4.25%
* AUD – RBA Rate Statement : at 3:30am
It’s among the primary tools the RBA Reserve Bank Board uses to communicate with investors about monetary policy. It contains the outcome of their decision on interest rates and commentary about the economic conditions that influenced their decision. Most importantly, it discusses the economic outlook and offers clues on the outcome of future decisions.
* CHF – Foreign Currency Reserves : at 8:00am
It’s Measures; Total value of international reserves and foreign currency liquidity.
Previous 242.7B, Forecast
* GBP – Halifax HPI : at 8:00am
It’s a leading indicator of the housing industry’s health because rising house prices attract investors and spur industry activity.
Previous 1.2%, Forecast
* CHF – Consumer Price Index (CPI) : at 8:15am
Consumer prices account for a majority of overall inflation. Inflation is important to currency valuation because rising prices lead the central bank to raise interest rates out of respect for their inflation containment mandate.
Previous -0.1%, Forecast 0.1%
* CAD – Building Permits : at 1:30pm
It’s an excellent gauge of future construction activity because obtaining a permit is among the first steps in constructing a new building.
Previous -4.9%, Forecast 2.3%
* CAD – BOC Rate Statement : at 2:00pm
It’s the primary tool the BOC uses to communicate with investors about monetary policy. It contains the outcome of their decision on interest rates and commentary about the economic conditions that influenced their decision. Most importantly, it discusses the economic outlook and offers clues on the outcome of future decisions.
* CAD – Overnight Rate : at 2:00pm
ForexFactory.com Notes; The rate decision is often priced in the market so it tends to be overshadowed by the BOC Rate Statement which is focused on the future.
Previous 1.00%, Forecast 1.00%
* CAD – Ivey PMI : at 3:00pm
It’s a leading indicator of economic health – businesses react quickly to market conditions, and their purchasing managers hold perhaps the most current and relevant insight into the company’s view of the economy.
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