CFD Markets News and Forecasts — 18-07-2011

USD/CHF holds around Chf0.8190, challenging strong resistance zone at Chf0.8180/90 (23.6% Fibo of Chf0.8520 - Chf0.8080 move). Break above targets Chf0.8250 (38.2%) and Chf0.8330 (Jun 13 high).

Stocks have been under pressure all session. As a result the S&P 500 fell more than 1% to a new July low.
The gain by gold bullion has helped drive higher shares of metals and mining players in the face of broad market weakness, which has taken all 10 major sectors in to the red to trade with losses of about 1% or more.
Financials have been the poorest performers for virtually the entire session (-2.0%).
With stocks under such heavy pressure, the S&P 500 has slipped below the 1300 line for the first time this month.

Today the dollar strengthened against a basket of rival currencies on concerns about the euro-zone debt crisis and the lack of agreement on raising the U.S. debt ceiling.

The market players focus on U.S. debt ceiling talks. If the debt ceiling isn’t raised from the current $14.3 trillion by August 2, the country would face technical default.

Early Monday the rating agency Moody's suggested the US debt ceiling itself should be eliminated to bring greater stability and avoid "periodic uncertainty."

The global debt concerns overshadowed the latest corporate reports, which have been generally better than expected.

The euro fell versus major rivals. Today Italy 10-year yield rose to 6.02% - highest since November 1997. Spanish bond yields also surged euro-lifetime highs.
Also analysts determined last week’s stress test of banks in Europe was fairly relaxed, stoking continued concerns about European debt.

Late Friday the European Banking Authority’s long-awaited stress tests showed that 8 banks failed and will need 2.5 billion euros ($3.5 billion) to survive a serious downturn. 16 other lenders passed, but should raise more money.

European sovereign fears, combined with wrangling over raising the debt ceiling, have boosted safe havens.

The franc reached a new record high versus the dollar on demand for safety after ECB President Jean-Claude Trichet noted again his opposition to any restructuring of Greek debt.

Today the gold reached a new historical high at $1.603.80. Investors see gold as the best place to park their money when there's economic or political uncertainty.

AUD/USD declines after it broke support at $1.0580. Rate currently holds around $1.0564. Now support comes at $1.0530/20 and we remain in a bearish market. A hold here could not rule out a squeeze to $1.0690/0700.

EUR/USD printed lows around $1.4015 with euro currently rebounding to $1.4040. Bids remained ahead of $1.4000. Flows still described as very light, but not quite summer doldrums yet.

USD/CAD rises, holding currently at C$0.9620. Traders mention stops at C$0.9625 level (also Friday's high). Rate holds much higher daily lows on C$0.9533.

Hallburton, Hasbro and IBM today. Apple, Bank of America, Bank of New York Mellon, Coca-Cola, Goldman Sachs, Johnson & Johnson, State Street and Yahoo! on Tuesday. American Express, BlackRock, eBay, E*Trade, Intel and United Technologies on Wednesday. Advanced Micro Devices, AT&T, Morgan Stanley, Pepsico, Travelers on Thursday. Caterpillar, Ford, General Electric, Honeywell, McDonald's, Schlumberger, Verizon and Xerox on Friday.

The major equity averages have managed to pare some of their losses so that they are now down modestly this morning. Pressure remains broad based, though; all 10 major sectors are in the red.
Tech issues have done a good job of limiting losses, though. The sector is down just 0.1% at the moment. Among tech issues, IBM (IBM 176.29, +0.75) is sporting a modest gain ahead of its quarterly report this evening. The Capital IQ earnings estimate calls for $3.02 per share. Big Blue generated earnings of $2.61 per share for the same period one year ago.

The euro fell to a record versus the Swiss franc and slid the most in almost a week against the dollar on concern European leaders will fail to agree on a way to contain the region’s debt crisis at a summit this week.
The franc also reached an all-time high versus the dollar after European Central Bank President Jean-Claude Trichet repeated his opposition to any restructuring of Greek debt. The yen strengthened against all but one of its 16 major peers tracked by Bloomberg and gold rose to a record, while stocks declined as investors sought the safest assets. Sweden’s krona dropped on speculation Europe’s debt crisis will crimp growth.
“The comments over the weekend still create uncertainty,” said Marcus Hettinger, a foreign-exchange strategist at Credit Suisse Group AG in Zurich. “We have risk aversion in the debt markets before the meeting and that’s pushing the Swiss franc higher and the euro lower.”
Immediate-delivery gold gained as much as $8.50, or 0.5 percent, to $1,602.05 an ounce.
Italian 10-year bond yields rose 25 basis points to 6.0 percent today, approaching the 6.02 percent euro-era record reached last week. Moody’s Investors Service said in a weekly report that Italy’s austerity measures are “a credit negative” for regional and local governments.
“A decision on another Greek package seems no nearer,” Adrian Schmidt, a currency strategist at Lloyds Banking Group Plc in London, wrote in an investor report. “The risks are for more weakness in peripheral bond markets and the euro being needed to concentrate politicians’ minds and force a decision.”
European stocks fell for a third day and a gauge of European banks reached a two-year low as analysts warned that as many as 20 lenders may need to bolster capital following European stress tests. The Stoxx Europe 600 Index declined 1.1 percent, with banks dropping 1.7 percent.
Euribor futures rose, pushing the implied yield on the contract expiring in March 2012 down three basis points to 1.66 percent as investors trimmed bets on higher ECB interest rates.

EUR/USD:
Offers: $1.4070/80, $1.4100/10, $1.4130/35, $1.4195/00
Bids: $1.4000, $1.3980, $1.3960/50, $1.3900

EUR/USD $1.3900, $1.4000, $1.4135-40, $1.4150, $1.4165, $1.4185
USD/JPY Y79.00, Y79.25, Y80.00, Y80.65, Y80.90, Y81.00
EUR/JPY Y111.20
GBP/USD $1.6100, $1.6155, $1.6265
AUD/USD $1.0640, $1.0600, $1.0545, $1.0485, $1.0435

Eases to challenge session lows at $1.6065. Bids seen placed between $1.6065/60 with stops below, with further demand seen into $1.6050, attracted around the 200-DMA at $1.6052. More stops are noted below $1.6050, which if triggered expose next support at $1.6030 with reports that further stops reside below here.

• Thursday EU summit will calm markets, but won't fully solve debt crisis Thursday.

EUR/USD $1.3900, $1.4000, $1.4135, $1.4150, $1.4165, $1.4185
USD/JPY Y79.00, Y79.25, Y80.00, Y80.65, Y80.90, Y81.00
GBP/USD $1.6155, $1.6265
AUD/USD $1.0545, $1.0485, $1.0435

Hang Seng   21,769 -106.82 -0.49%  
S&P/ASX   4,472 -1.55 -0.03%   
Shanghai Composite  2,817 -3.48 -0.12%

Hang Seng   21,769 -106.82 -0.49%  
S&P/ASX   4,472 -1.55 -0.03%   
Shanghai Composite  2,817 -3.48 -0.12%

The S&P 500 lost 2.5% this week, and about two-thirds of that loss took place on Monday as concerns intensified about Italy's fiscal situation. Europe's fragile financial state remained in focus throughout the week, but commentary about the potential for QE3 took over mid-week after the FOMC minutes revealed discussion among Fed members about the potential for additional monetary policy stimulus, depending on how economic conditions evolve. 

Resistance 3: Y79.90 (high of american session on Jul 12) 

Resistance 3: Chf0.8275 (Jul 12 low)

Resistance 3: $ 1.6260 (Jun 22 high, resistance line from May 2, 50.0 % FIBO $1.6750-$ 1.5780)

12:30 Canada Foreign investment in Canadian securities (May) $7.41B $8.22B