Daily Market Review Dec 10, 09

Market Movers of the Day

Asia-Pacific

*Japanese GDP for the third quarter worse than expected at 1.3% annualized

*Australian Trade Balance worse than expected at -2379M

*The Reserve Bank of New Zealand kept benchmark interest rate at 2.5%

 

Europe

*UK Nationwide Consumer Confidence better than expected at 73

*Switzerland’s Unemployment rate lower than forecasted at 4.1%

*German CPI better than expected at 0.4% annualized

*German Trade Balance better than expected at 13.6B

*UK Total Trade Balance in line with market estimations at -£3.2B

*UK Pre-Budget Report

 

Americas

*US EIA Crude Oil stocks dropped 3.8 million barrels

*US Wholesale Inventories better than expected at 0.3%

 

The Overall Sentiment

 

Equities

US stock markets recovered from earlier losses, closing on the positive side, in a day where Europe provided the headlines. The S&P closed up 0.4%. European stock markets reacted negatively as Standard & Poor’s Ratings Services lowered Spain’s outlook on its debt to negative, one day after Fitch Ratings downgraded five Greek banks, raising worries about further debt grade reductions in additional European countries. The British FTSE 100 dropped 0.4% and the German DAX Index declined 0.7% led by losses from banks and financial institutions. The Japanese Nikkei 225 fell 1.3% on disappointing GDP figures showing that the country’s economy grew in the third quarter at a much slower pace than initially reported.

 

Forex

The Dollar traded in a volatile manner against most majors in a day with no key US economic data releases. EUR/USD altered between gains and losses, moving up to 1.4780 to fall back below 1.4680 and finally settling around 1.4725. The Pound weakened against the Euro and the Dollar ahead of the BoE’s rate decision as the Chancellor of the Exchequer Alistair Darling imposed a 50% tax on bank bonuses in his Pre-Budget Report and stated its intention to increase income taxes next year. The New Zealand dollar strengthened as the RBNZ left benchmark interest rate unchanged at 2.5% and its Governor Alan Bollard suggested that rate hikes may start in mid-2010. USD/CHF continued to move away from parity aiming the 1.03level ahead of the SNB’s interest rate decision.  The Yen strengthened against its US counterpart as the Japanese GDP for the third quarter increased by 1.3%, a much weaker expansion than the 4.8% initially reported.

 Get more info on rate decisions in Switzerland and  the UK

Commodities 

Gold extended losses with a visit under $1120 as risk aversion and the Dollar’s strength remain in place. Silver followed dropping below $17.40. Crude Oil briefly advanced as the weekly EIA stockpiles report showed an unexpected drop of 3.8 million barrels but quickly reversed to a massive sell-off, almost to the $70 level, as the strong Dollar and the proximity of the holidays prompt investors to start unwinding their positions.

 

Technical Analysis

 EUR/CAD DAILY

 

 

 

 

 

 

 

 

GBP/JPY has been trading sideways in the wide 156-160 range for the last six weeks. The cross has recently stepped out of the range, moving south to the 155 level, presenting the opportunity to open a Short position to take advantage of the building bearish pressure towards the 152.50 support.

 

Support/Resistance

 

 

 

Daily Events

 

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