The S&P futures are back in the green Monday as major Dollar pairs settle in the wake of last week’s intense pullback in the risk trade.  The EUR/USD, GBP/USD, and AUD/USD are all stabilizing this weekend as the weekend gave investors an opportunity to settle their nerves and assess the damage.  Furthermore, we’ve received several comments from global policy makers emitting confidence concerning the state of the global economy.  Trichet reassured leaders at the G7 summit that the ECB and EU have Greece’s deteriorating fiscal situation under control.  It seems officials are attempting to combat the negative psychological impact from last week’s debt scares in Greece in Portugal.  However, there remains a legitimate concern and last week’s selloff in the risk trade sent a clear message that investor uncertainty is at a heightened level.  More

The AUD/USD is stabilizing above its psychological .85 level and our uptrend lines as the risk trade stabilizes across the marketplace.  A weekend of rest coupled Trichet’s reassurances the ECB and EU have Greece’s debt issue under control has allowed the Dollar to ease off of last week’s highs following its incredible rally.  However, downward forces remain considering the extent of last week’s pullback and the risk trade will likely need several fundamental and psychological developments to break free of its downturn.  The data wire will be relatively quiet over the next couple trading sessions, giving the risk trade an opportunity to consolidate as investors assess the damage.  However, investors should keep a sharp eye on the news wire concerning developments in the EU since debt scares in Greece and Portugal were the driving force behind last week’s surge in the Dollar.  More

Gold is consolidating above its psychological $1050/oz area as activity in the FX markets cools down.  Trichet attempted to calm investors this weekend at the G7 summit by implying that the ECB and EU have the situation well under control.  We’ve seen multiple statements from governmental representatives hit the wires over the past couple days and it seems policy makers are looking to get the negative psychological forces under control.  The tactic has worked thus far with the Cable, EUR/USD and AUD/USD all consolidating.  Furthermore, the data wire is relatively quiet today, giving investors and analysts little to work with.  Economic releases won’t pick up again until Wednesday’s Asia trading session with the release of Australia’s Home Loans data accompanied by China’s Trade Balance data.  More

The USD/JPY is fluctuating below the highly psychological 90 level as FX markets cool down in the wake of last week’s heavy volatility.  Although the USD/JPY was holding up relatively well, the currency pair finally gave in to downward forces as investors exited the risk trade in a flurry.  Debt scares in Greece and Portugal combined with mixed global economic data sent bulls to the exits with the Cable and EUR/USD registering hefty pullbacks.  The USD/JPY was performing relatively well for a while since the BoJ’s dedication to fight deflation managed to counter the flight to the Dollar.  Furthermore, recalls from Toyota has placed a downward pressure on Japanese equites, a negative development for the Yen.  However, the USD/JPY slid late Thursday as the decline in the risk trade accelerated and the USD/JPY is currently attempting to stabilize.  The data wire will be relatively quiet until China’s New Loans and Trade Balance data.  More

The Cable is hovering around Friday lows after continuing its extensive decline in the wake of strong UK PPI data.  Friday’s resurgent PPI data couples with a similar CPI reading, indicating a pop in prices which could discourage the BoE from tightening liquidity.  However, Mervyn King recently stated that the central bank is not overly concerned about the recent rise in prices and implied that it is not indicative of a more lasting trend.  Regardless, there are many other reasons for the BoE to take a wait and see approach, including economic uncertainty in the EU and liquidity tightening in China.  Therefore, the Cable showed little hesitation in participating with last week’s route from the risk trade.  The risk trade will be relatively quiet for the next 24 hours, giving the risk trade an opportunity to calm down as analysts and investors assess the damage.  More

The EUR/USD is settling and cooling as investors take a step back to revise their outlooks in the wake of last week’s aggressive selloff in the risk trade.  Trichet attempted to alleviate investor uncertainty by reassuring markets that the ECB and EU will make sure Greece takes care of its deteriorating fiscal situation.  Meanwhile, the data wire is relatively quiet until China releases its New Loans and Trade Balance data.  Hence, the FX markets have an opportunity to settle down over the next 24 hours should no new conditions flare up.  However, unions in Greece are threatening to strike on Wednesday as the government announces its plans for reducing the nation’s outstanding fiscal debt.  Should unrest swell in Greece this could disrupt markets once again.  That being said, the risk trade is still in a fragile state with downward pressure bearing down on the EUR/USD.  More

The S&P futures are undergoing a hefty selloff as investor uncertainty mounts.  From the U.S. to Australia, economic data disappointed investors.  America’s data points were the most disconcerting with weekly Unemployment Claims, productivity, and labor costs all disappointing.  Hence, unemployment continues to improve at a snail’s pace.  Meanwhile, the ECB and BoE both decided to pause as central bankers evaluate the impact of Greece’s debt issues and China’s liquidity tightening on global growth.  Speaking EU debt problems, the Dollar surged today after the IMF issued a warning concerning Portugal’s fiscal affairs.  Hence, it seems the EU now has to take fire for both Greece and Portugal.  With Spain’s fiscal house also in disorder, it makes one wonder when the IMF may issue a warning for Spain as well.  Today’s developments are having a profound impact on the Dollar and gold.  More

  The Dollar is skyrocketing across the board as the Yen begins to crash as well, signaling investors are making a run for safety.  The AUD/USD is participating fully as investors still have a sour taste in their mouths following the RBA’s decision to halt its rate hike.  The ECB and BoE followed suit by taking a neutral wait and see approach.  Meanwhile, Australia’s Retail Sales data disappointed estimates and Building Approvals outperformed, setting a mixed tone for Australia’s economy.  Additionally, America’s data set disappointed this morning with a pop in Unemployment Claims, productivity, and earnings.  Hence, economic fundamentals were altogether negative today, adding downward pressure on the AUD/USD and other major Dollar pairs.  The scale truly tipped after the IMF issued a warning concerning Portugal’s deteriorating fiscal situation.  More

Gold has been hammered by an enormous 4-hour down bar as the Dollar surges against the Euro, Pound, and Aussie.  Investors obviously didn’t care for central bank statements from the ECB and BoE as both decided to stay neutral and take a wait and see approach.  Central bankers seem to be monitoring how economic uncertainties such as the debt issue in Greece and tightening in China impact global economic growth.  Meanwhile, today’s U.S. economic data set printed negatively, fueling Dollar purchases and extending losses in major Dollar pairs as investors headed for safety.  Such a development doesn’t bode well for gold considering its negative correlation with the Greenback.  Gold has proceeded to tumble below all of our uptrend lines and previous 2010 lows.   This is a negative development technically since our 1st tier uptrend line runs through August 2009 lows, or the $935/oz area.  More

The USD/JPY is registering only a moderate decline today as the Dollar surges against the Euro, Pound, and Aussie.  Investors are rushing to the Dollar as a safe haven amid neutral monetary policy statements from European central banks combined with weak economic data around the globe.  Both the BoE and ECB kept the monetary policies on hold as central banks take a wait and see approach in regards to the health of the global economic.  Debt issues in Greece and tighter monetary policy in China has caused central bankers to omit hawkish comments as they monitor how these negative economic developments will impact global growth.  Meanwhile, negative data from the U.S. and UK has only fueled the Dollar’s climb, causing large pullbacks in the Cable and EUR/USD.  However, the USD/JPY is holding up relatively well since Japan has been quiet on the data front and the BoJ continues to state that it will fight deflationary forces.  More

The Cable is crashing with the EUR/USD after the BoE issued a more Dovish monetary statement than anticipated.  Although the BoE halted its QE program as expected, Mervin King stated that the possibility of more QE is on the table such economic conditions deteriorate.  Hence, despite some positive economic data lately the BoE is opting to take a wait and see approach to determine whether the global economic recovery has hit a bump in the road or if we are beginning a more protracted pullback.  Furthermore, it seems all central banks want to gauge how tighter liquidity measures in China will impact global growth.  The wait-and-see policies issued from central banks have heightened investor uncertainty, leading investors to the Dollar as a safe haven.  Today’s weaker than expected Halifax HPI data didn’t help matters either, adding further downward pressure on the Cable.  Meanwhile, investors are also reacting to a pop in U.S. Unemployment Claims and Productivity.  More

The EUR/USD is extending yesterday’s pullback after the ECB kept its monetary policy unchanged as analysts estimated.  German Factory Orders printed -2.5% below analyst expectations, adding downward pressure on the EUR/USD.  Investors are also digesting a skyrocketing unemployment rate in New Zealand along with a slight pop in U.S. Unemployment Claims.  Hence, negative economic indicators continue to flash around the globe and the Dollar is benefitting as investors route the risk trade.  Furthermore, investors should keep in mind that U.S. economic data has been altogether positive before today’s set, so the Dollar has become an ideal hiding place amidst uncertainty.  Meanwhile, we recognize a huge bar down in gold, confirming the negative sentiment regarding the risk trade since the precious metal is negatively correlated with the Dollar.  Although the EU will release German Industrial Production tomorrow, focus will be on the U.S.  More

The S&P futures rallied initially off of a stronger than expected headline ADP Non-Farm Employment Change figure.  However, the ADP data carries a silver lining in that planned layoffs jumped.  Hence, the ADP’s climb to a break-even point left a bitter after taste.  The U.S. later released Services PMI data which printed shy of analyst expectations.  Hence, today’s data set ended up negatively mixed.  The UK also released a Services PMI number below estimates earlier today, resulting in a hefty selloff in the Cable.  The Dollar is staging a broad-based rally in light of today’s economic data, a negative development for the S&P futures considering correlative forces.  Meanwhile, Australia’s Trade Balance deficit printed a little lighter than expected, a welcome number considering the hit the Aussie took yesterday after the RBA decided to pause its rate hikes.  More

It’s been another very active session for the AUD/USD again.  After crash yesterday in reaction to the RBA’s decision to stand pat, the AUD/USD posted a sizable rally during the Asia trading session, almost reaching 2/1 highs.  Money flowed into the Aussie after Australia’s Trade Balance deficit printed shallow of analyst expectations, implying that the RBA is being more cautious than negative economically by halting its rate hikes.  However, the AUD/USD has reversed course again on heavy volume after U.S. ADP Non-Farm Employment Change data came in stronger than analyst expectations.  The figure did come with a silver lining since the number of planned layoffs jumped.  Regardless, the data led to a broad reversal in the risk trade, dragging the Aussie lower in wake of the RBA’s pause.  Additionally, investors just received a U.S. Services PMI number below analyst expectations, further strengthening the Dollar as investors head for safety.  More

Gold has been all over the place today.  The previous metal climbed higher during the Asia trading session as the risk rally continued in light of Australia’s encouraging Trade Balance data coupled with news the EU is accepting Greece’s plan to reduce its fiscal debt.  However, gold reversed course and dove back to intraday lows after U.S. ADP Non-Farm Employment Change data printed stronger than analyst estimates.  The positive headline ADP number sent investors back towards the Dollar in a hurry, registering large down bars in the EUR/USD and AUD/USD in the process.  The Dollar’s rally resulted in an accompanying decline in gold due to correlative forces.  Meanwhile, investors are awaiting U.S. Services PMI data due shortly.  That being said, FX markets and gold could remain active throughout the remainder of the session.  More

The USD/JPY is back on the rise as the Dollar appreciates across the board in reaction to a stronger than expected ADP Non-Farm Employment Change figure.  The outperformance of recent U.S. economic data has led investors towards the Dollar amidst economic uncertainties taking root across the globe.  The USD/JPY is benefitting in particularly since Japan’s recent economic data has left something to be desired.  Additionally, recalls at Toyota combined with the BoJ’s vocal determination to fight deflation has resulted inventors snapping up the Dollar against the Yen in light of economic improvements in the U.S.  Investors are currently awaiting U.S. Services PMI data due shortly.  Considering our analysis above, a positive Services PMI number could send the USD/JPY beyond previous February highs.  Meanwhile, both the BoE and ECB will make monetary policy decision tomorrow and the U.S. will release weekly Unemployment Claims data.  More

The Cable has come crashing down from the perches of its Asia trading session rally.  The risk trade rallied across the board after Australia’s trade Balance printed stronger than expected followed by an EU approval of Greece’s plan to reduce its outstanding fiscal debt.  However, gains were soon washed away after Britain’s Services PMI data point came in below analyst expectations.  UK data has been outperforming lately, making the pullback in services a shock for investors, and the Cable’s ensuing downturn reflected this mental state.   Services comprise a large part of the UK’s GDP, so weakness in services trumps strength in manufacturing. The Cable’s intraday decline accelerated after U.S. ADP Non-Farm Employment Change data printed stronger than analysts anticipated.  Strong U.S. employment numbers led investors to the Dollar as a safe haven due to the recent wave of positive U.S. economic data.  Meanwhile, investors are awaiting U.  More

The EUR/USD staged a solid rally over the past 24 hours as investors returned to the risk trade with the lack of negative psychological forces.  The EU later fed the rally by announcing it is backing Greece’s plan to get its fiscal house in order.  However, it remains to be seen whether this is a sign of concrete support or a political move to give the Euro some psychological support.  The risk trade has made a direct u-turn during the U.S. trading session after the headline U.S. ADP Non-Farm Employment Change number printed stronger than analyst expectations.  In fact, the barometer almost registered jobs growth.  On the downside, the ADP data revealed that announced layoffs increased significantly, taking a bit of the optimism out of the number.  Either way, this data point has proven to be Dollar positive.  Encouraging jobs data along with recent positive data releases has made the Dollar an ideal safe haven amidst global economic uncertainty.  More

U.S. Pending Home Sales beat analyst expectations today, a welcome surprise considering the last release printed much lower than estimated.  Today’s Pending Home Sales figure continues the theme of strong U.S. economic data dating back to Friday’s set.  We’ve witnessed upticks in housing, manufacturing, and inventories.  However, the key data remains to be seen with Services PMI and employment numbers emerging as the week progresses.  For the time being positive data and earnings are helping buoy the S&P futures, which are approaching their highly psychological 1100 level once again.  Meanwhile, chatter is subsiding regarding Greece’s debt situation and the state of the UK’s financial industry.  The release of negative psychological forces is allowing U.S. equities and the risk trade to recover.  The Dollar is weakening across the board while the Cable and EUR/USD make up for some lost ground.  More

The RBA in fact opted to keep its benchmark rate in check during today’s Asia trading session as the central bank monitors slight price declines and gauges the impact from China’s more hawkish monetary policy stance.  The RBA’s decision surprised markets and resulted in an immediate selloff since a majority of analysts were pricing in a 25 basis point hike.  Losses in the AUD/USD were sizable, yet the currency pair managed to bottom out just around Monday lows.  Therefore, the currency pair appears to have salvaged a more extensive collapse for the time being and is presently strengthening in light of better than expected U.S. Pending Home Sales data.  Strong U.S. housing data has led investors back to the risk trade so far while gold strengthens above its psychological $1100/oz level.  In fact, the precious metal has broken out of our 3rd tier downtrend line, a positive sign for the Aussie since the trend line runs through the $1140/oz level.  More