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Currency markets mainly consolidated ahead of tomorrow’s non-farm payroll report. The ECB extended its unlimited cash to banks throughout this year, an attempt to not take away special liquidity measure when financial markets remain fragile. US data showed labor producitivy slid in the 2nd quarter – a sign companies may have to start hiring, while a measure of pending home sales surprised on the upside – a rare positive release for the US housing market.

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There was little to read into Thursday’s initial claims report ahead of an expected 100,000 dip for U.S. employment throughout August. Yet the better tone indicated by the health of global manufacturing and what earlier appeared to be a bolt-out-of-the-blue in the shape of returning consumer confidence continues to weigh on bond prices. For a second day yields are moving rapidly higher. Australian bills – Short-dated yields down under continued to rise for a second day as investors took back

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After yesterday’s risk-taking rocket ride the obvious reaction is to sit and watch for a reaction. Will traders take the opportunity to sell after yesterday’s strength? And if so is it profit-taking or simply an opportunity to get short? Or is yesterday’s strength a sign that traders and investors are done pricing in double-dip recession potential? While risk assets are mostly flat as we get going here in the US, the New Zealand dollar is the standout thanks to what seems to be a signal from

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You won’t be surprised when I say the U.S. markets are lousy right now. Can you find niches that are performing well? Sure — I often highlight these for you when I see them. But most U.S. stocks and sectors are going sideways at best. Moreover, I don’t see the situation changing in the near future. This doesn’t mean you’re stuck in a low-yielding cash account, though. The world is full of opportunity for those who know where to look. Places like South America and Southeast Asia are still

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The European common currency and the US dollar are under pressure ahead of the rate decision and Trichet's speech in the euro zone and jobless claims data in the United States. The euro is showing slight advance against the dollar and pared some of its losses against the yen before the September's rate decision. Expectations refer that the euro zone will leave the borrowing cost unchanged at 1.00% and leave non-standard measures till next year to reinvigorate recovery that is gathering

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Equity markets – unexpected rise in the ISM Despite a significant deterioration in the regional activity indices (especially in the region of Philadelphia) the national ISM snapped a three-months losing streak with a highly unexpected rise (the consensus was at 53 pts.) from 55,5 to 56,3 pts. The index has a relatively healthy structure with higher production and (quite interestingly) employment. The data means the US economy, while on the soft patch, isn’t collapsing and for as long as

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Headlines Fixed Income: Czech issuance calendar implies the issuance of Eurobond Czech Republic Even as the rest of the eastern European markets, such as Hungary or Romania, experience an active trading, the Czech currency market is further dominated by the holiday sentiment. This cannot even be unlocked by the comments of domestic central bankers. The EUR/CZK currency pair thus continues to wander in a tight zone close to the EUR/CZK 24.80 level and this range-trading might prevail even

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It was all about the manufacturers yesterday as Chinese and US PMIs showed a pick-up in sentiment in the sector. Risky assets went on the tear as a result with the FTSE finishing up 2.7% , the S&P gained 2.95% and the Dow Jones put on 2.54%. In currency world this translated to gains for the AUD, CAD and euro with sterling managing to eke out gains against haven currencies such as the JPY, CHF and USD. The sterling gains haven’t Lasted however and GBPUSD has come back to the 1.54 level

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On Wednesday, EUR/USD trading finally did wake up after a period of very dull holiday-driven trading conditions of late. EUR/USD already recorded some moderate gains in Asian, but the real break higher occurred during the morning session in Europe. The move occurred more or less in step with quite an impressive rebound on the equity markets. So, the return of risk was the reason for this up-tick in EUR/USD. To be honest, we didn’t see the exact reason for the forceful rebound both in EUR/USD

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Crisis mode supports dollar EURCHF below 1.30 US Yields weaken Dollar vs. Yen, BoJ “disappoints� markets US dollar A cluster of weak US economic data continued to drag down the sentiment on the financial markets. But after the massive appreciation of the dollar in the first half of the month the momentum has clearly subsided in the past weeks. The US dollar still benefits from its role as safe haven, although the weak US macro data in conjunction with the good economic news coming from the

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Previous session overview The euro fell against the yen in Asia on Thursday on the view that European Central Bank President Jean-Claude Trichet may take a less hawkish line on monetary policy at an upcoming press conference. During Asian trade, non-Japanese hedge funds were selling a solid amount of euros, pushing it down to JPY107.70 as of 0450 GMT, from JPY108.11 late Wednesday New York. The euro was also weaker against the dollar, at USD1.2791 from USD1.2800. The yen, meanwhile,

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Yesterday, markets witnessed majors moving to the upside and closed higher against the dollar. however, markets started today’s trading with limited volume, where the yen gained against its major counterparts, after a report that showed Australia’s trade surplus narrowing more than analysts' expectations.  The euro rose yesterday against the dollar breaking the support 1.2780, and despite today’s decline, the pair remained above the previously mentioned level. The euro/dollar recorded

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Market Brief Asian equity markets have opened on a positive note this morning following the strong gains posted in the US session yesterday on the back of increased risk seeking resulting from better than expected economic data out of the US. The ISM manufacturing index bettered analysts estimates at 56.3 actual v 52.8 exp while the ADP employment reading showed a drop in new jobs added, showing a decrease to -10k jobs. We remain sceptical on the weaker ADP reading, as the number has been

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News and views Large bounce in risk sentiment. US equities (S&P500) are currently 3.0% higher following a day of news conducive to risk seeking. The earlier solid outcomes for Australian GDP and Chinese manufacturing set the starting tone for the European and US sessions, partly explaining the modest effect the weak US (ADP) jobs report had on markets. US manufacturing data later continued the bullish theme. Other factors at play may have been new-month buying, as well as a seasonal

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The US dollar fell against most major currencies with the exception of the Japanese yen after upbeat data from China and Australia boosted risk appetite. China’s manufacturing sector had a moderate rebound in August after slowing for several months which helped soothe worries over the health of the global economy. However, market sentiment was slightly dented after the US private sector unexpectedly cut jobs in August delivering yet another blow to the already faltering economic recovery. A

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Although this month is known as "Black September" because of its propensity to provide negative stock returns, the first trading day of September has now posted gains in 12 of the last 15 occasions. It is also important to realize that despite media banter about dismal performance in September, the average broad market loss is less than 1%. The bears will tell you that in September of 2009 the markets were coming off a rough August, not unlike what we are seeing play out in 2010. Similarly,

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Just as Treasury traders focused on the bullish fundamental factors in yesterday's session, today was all about the bearish arguments. Unfortunately, the market is having difficulty coming to a reasonable middle ground. A few days ago, we called for consolidation trade in the Treasury markets and I guess in a roundabout way that is what we are seeing. However, this is the most exciting consolidation I have seen in years! The long bond has been quickly moving between 135ish and 132ish. The

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Australian Dollar: The Australian Dollar opens higher today against its U.S. counterpart at 0.9095 after strong economic data releases in Australia and China on Wednesday. Hot on the heels of Tuesday's triumvirate of better-than-expected economic data came yesterdays second quarter national accounts which revealed the domestic economy grew at 1.2 per cent for an annual pace of 3.3 per cent. The Aussie dollar rallied sharply on the news towards US90 cents as investors raised their bets the

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EURO The euro appreciated vis-à-vis the U.S. dollar today as the single currency tested offers around the US$ 1.2855 level and was supported around the $1.2660 level.  The common currency reached its strongest level since 19 August as dealers lifted the pair but stopped short of testing short-term resistance around the $1.2875 level. Data released in the U.S. today saw MBA mortgage applications move lower to +2.7% while August Challenger job cuts were off 54.5% y/y.  Also, August ADP

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Manufacturing releases from China and the US, and a very strong 2nd quarter GDP report from Australia helped to propel global stocks to strong gains. In NY morning trading the Dow Jones Index for instance was up 240 points. That helped “�higher yielders� like the Australian and Canadian Dollars, the Euro and the Pound gain on safe haven currencies like the US Dollar.

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Forex traders, join the daily All Things Forex broadcast- a live one hour program covering Forex and major economic events, trend developments, research, analysis, ideas, education, live traders forum, interviews with some of the most respected names in the trading world, and much more.. In the broadcast today: How will the Non-Farm Payrolls Impact the USD? Ahead of the U.S. Non-Farm Payrolls and Employment Situation report, we examine the consensus forecasts for the outcome of this crucial

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FX Weekly Preview: 31st August – 5th September 2010 by George Tchetvertakov Looking Ahead: •Large swathe of data across the G20 suggests volatility will spike higher this week •Two interest rate decisions (Riksbank, ECB) – event risk is significantly higher in Sweden rather than the EMU •US growth + additional QE will be the core themes with US employment and ISM surveys bearing huge significance given the timing and current circumstances facing the US recovery •BoJ Yen intervention issue

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Questions over the extent of the recent scorching run for global bond prices came to a head after the release of FOMC minutes appearing somewhat more cautious than previously thought. Meanwhile a string of robust manufacturing surveys from around the globe pricked the bond bubble reversing the recent slide for yields. However, a private sector payroll report provided a foreboding signal for the labor market ahead of a key report due on Friday and helped to contain a midweek rout for bonds.

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We’ve been strident about the idea that global growth decoupling from the US is a myth.  The idea being the US consumer is still the primary demand engine for the world, and Mr. US Consumer becomes all the more important as European demand heads into its austerity shell.  But today’s news has us wondering a bit about our stridency.   China’s PMI rebounding above the 50-level this month, surprising some analysts, which includes us.  We’d like to chalk it up to “officialâ€�

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The Japanese yen and US dollar fell against majors as the upbeat manufacturing report from China and second quarter growth data from Australia gave stocks a boost and damped demand on refuges, ahead of the release of US ADP employment change and ISM manufacturing. Later in the day, ISM manufacturing for August is expected to show decline 52.8 from 55.5 while ADP employment change will reach 15 thousands in August from 42 thousands in July, yet the main highlight of the week will be

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Equity markets – CB up, good news from Asia Conference Board, the US major sentiment index unexpectedly moved up in August (to 53,5 pts. from revised up 51 in July), reversing a large part of the July’s decline. This positive surprise was helpful as it stopped a wave of fear (mostly ahead of Friday’s payrolls) clearly gaining momentum. However, from a longer perspective it’s not a game changer. The index still seats at annoyingly low level and doesn’t offer any hope for a shopping rush from

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Headlines Currencies: CNB’s Tomsik sees first rate hike possible mid 2011 Fixed Income: Czech Finance Ministry declares low financing needs for end of the year Czech Republic The Czech koruna strengthened on Tuesday, returned below 24.80 EUR/CZK and closed the day around 24.77. It has practically erased the losses from the start of the week and confirmed that the area around 24.80 is the preferred range for now. The pair ignored comments from vice CNB governor Tomsik who, contrary to some of

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U.S. DAP Employment Report, ISM Manufacturing Index and Australian GDP are at the top of our market moving events for today. Here is an outlook on the economic activities awaiting us. In the US, Automatic Data Processing Employment Report, a measure of jobs lost or added to the private sector of the economy, also serving as a preliminary estimate for the outcome of the monthly non-farm payrolls expecting a slower jobs creation of up to 20 K jobs in August from 42 K in July and Challenger Job

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The markets leapt out of the summer doldrums with a bang yesterday; unfortunately it was to sterling’s detriment. The pound lost a full percent against both the USD and the EUR as traders worried over the state of the world recovery. There was little data over the long bank holiday weekend from the UK and although what was published was positive (UK consumer confidence surprising to the upside) the global macro picture took precedence. We expect a higher risk premium to be attached to the

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Data out recently is showing that the UK housing market appears to be slowing down. House prices rose slightly in July but the rate at which this recovery is occurring has fallen 6.7% from last May where growth was at 8.7%. This was according to the UK land registry which are often considered to be a lagging indicator of house prices as they reflect transactions prior to the purchase. Mortgage lending is also continuing to fall, apparently activity in the housing market continued to drop in

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On Tuesday, investor uncertainty continued to weigh on global market sentiment. However, this time the negative impact on EUR/USD was much less than was the case on Monday. EUR/USD was seen in the 1.2640 area at the start of trading in Europe but the pair even managed to reverse part of Monday’s/overnight losses, testing offers at around 1.2700 around noon in Europe. As was often the case of late, there was again no specific trigger to explain this recent flaring up of global negativism. The

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Previous session overview The yen gave up overnight gains against the dollar and euro in Asian trading Wednesday, as stronger regional share markets cut into demand for the safe-haven Japanese unit, which was also hit by statements from a highly influential politician favoring direct intervention by Japan. But amid lingering concerns over the health of the global economy, the yen is unlikely to weaken sharply for the rest of the week, especially ahead of U.S. employment figures Friday, traders

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Wall Street began the day with a soft as driven by weakness in Asian and European bourses. However, prices rebounded as economic data released appeared stronger than expected. DJIA and S&P 500 Indices ended the day flat. In the commodity sector, crude oil price tumbled as Chicago PMI missed consensus. Slowdown in the manufacturing sector could dampen oil demand. Moreover, surprising increase in crude inventory also triggered the selloff. Gold rallied to a 2-month high after a few days of

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News and views US equities were little changed, consolidating near the month’s low. There was a minor bounce after the better house price data, but the FOMC minutes dampened the mood and the S&P500 closed unchanged. The minutes had a clear dovish tilt, downgrading economic growth expectations, and suggested a willingness to reinvest in either treasuries or MBS. Commodities fell, the CRB index 1.3% lower, with oil plunging 4.0% and copper down 2.1% on economy concerns. Gold rose 0.8% to a

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The US dollar is mixed today as risk once again shifted in favor of lower yielding currencies. The dollar fell vs. the euro and yen despite a better than expected consumer confidence read of 53.5 vs. 50.7 eyed. Recent comments from Fed Chairman Ben Bernanke suggested that the economic growth has been “too slow� and unemployment is currently “too high�. The euro recovered this morning after a comeback in risk aversion, sending Asian equities lower. German unemployment reported positive data,

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Australian Dollar: Australian economic data released yesterday surprised the market somewhat with Retail Sales, Building Approvals and the Current Account all coming in above expectations. Consumer spending rose 0.7% during July, up from 0.4% the previous month however it was the massive narrowing in the Trade Deficit from 16.5 billion AUD to 5.6 billion, the narrowest since 2002, which attracted the most attention. The news provided some support for the Aussie dollar which initially rallied

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8/31/2010 07:30 am: EUR/$..1.2690 $/JPY..84.42 GBP/$..1.5369 $/CHF..1.0196 AUD/$..0.8862 $/CAD..1.0635 Yen, Bonds Rise- Risk Off Global equity bourses were sharply lower after a drop in US markets saw the Dow, the S&P, and the Nasdaq fall by 1.4%, 1.5%, and 1.6% respectively. Markets closed out August in the red on mounting concerns that the global recovery is faltering. Although PCE and personal spending figures were largely in line with expectations, a miss on personal income and a

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EURO The euro appreciated vis-à-vis the U.S. dollar today as the single currency tested offers around the US$ 1.2740 level and was supported around the $1.2625 level.  The common currency gave back some of last month’s gains in August and its intramonth support was just below the 50% retracement of the $1.1880 - $1.3335 range.  Dealers lifted the common currency to intraday highs during the North American session before booking profits.  Data released in the U.S. today saw the

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Highlights We continue to think that economic recovery is on track in most of the developed world and that emerging Asia will continue to expand robustly. On the other hand, recent U.S. developments cannot be ignored. Though we trace much of the expected Q3 slowdown in U.S. domestic demand to the unwinding of temporary stimulus, the recovery remains fragile. Fiscal policy is a key source of uncertainty. At this writing the future of the Bush tax cuts, set to expire at the end of this year, is

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Today’s session was market by Euro strength, which was either a correction to the swings we saw the begin the week, or some end of the month flows that boosted demand for the Euro. We saw safe haven currencies continue to gain otherwise, with the Yen and US Dollar gaining on commodity currency pairs, while the Swiss Franc hit a fresh all-time high against the Euro, and hit its highest this year.