CFD Markets News and Forecasts — 22-08-2011

Even though the stock market has rebounded to a gain of about 1%, the financial sector has struggled to follow it. Financials did managed to poke back into positive territory recently, but they have since slipped back to the flat line. The sector continues to be hampered by bank stocks, especially diversified banks and financial services stocks. Weakness among banks comes as some question just how fundamentally sound the institutions are and just how well they could sustain any kind of double-dip recession.

The euro fell against the majority of its most-traded counterparts, erasing earlier advances, as stocks pared gains, damping demand for higher-yielding assets.
The yen slid from almost its postwar record versus the dollar after Japanese Finance Minister Yoshihiko Noda said he’s ready to take decisive steps to stem its strength. The dollar dropped earlier amid bets Federal Reserve Chairman Ben S. Bernanke will signal at an Aug. 26 conference in Jackson Hole, Wyoming, the Fed will boost monetary stimulus.
“Everyone is focusing on equities and taking their cues from that,” said Andrew Cox, a New-York based currency strategist at Citigroup Inc. “The euro has traded in a very tight range and we don’t see a catalyst for that to change, at least before Friday.”
The Standard & Poor’s 500 Index was up 0.4 percent after appreciating earlier as much as 2 percent.

The major equity averages have made a modest move up from their session lows, but the effort has yet to gain much traction.
Meanwhile, the dollar is up to a narrow gain against a collection of competing currencies. It had been down markedly against that basket earlier today.
Despite the dollar's advance, gold prices have reclaimed earlier gains. In turn, the yellow metal is back up to $1890 per ounce, sporting a 2.0% gain.

Greece extending its underperformance on concerns that Athens' second bailout programme could be derailed if other countries seek to imitate Finland's deal on collateral. Spain & Italy spreads are both tighter on talk ECB is buying via SMP. Irish spreads are tighter and outperforming on increased calls for economist Morgan Kelly's debt forgiveness scheme for struggling homeowners, which is estimated to cost up to E6bln.

The major equity averages have surrendered about half of the gains that they had achieved out of the gates. The downward chop comes after the S&P 500 encountered resistance near the 1145 line in the opening minutes of the session.
Financials, a frequent driver of broad market action, have been steadily falling out of favor. The sector is currently up just 0.3% after it had sported a gain of about 2% only minutes after the toll of the opening bell. Bank of America (BAC 6.66, -0.30) has been the heaviest drag on the financial sector. The stock's weakness has spread to other diversified financial services providers like JPMorgan (JPM 34.23, -0.12), which has slipped to a modest loss.

Friday's rumors about CME margin hikes still linger and further gold volatility is likely this week.

EUR/USD: $1.4235, $1.4250, $1.4390, $1.4400, $1.4450, $1.4500, $1.4550, $1.4600 
USD/JPY: Y76.00, Y76.50, Y77.00, Y77.65
EUR/JPY: Y108.00
GBP/USD: $1.6650
USD/CHF: Chf0.7900
AUD/USD: $1.0550

U.S. stock futures rose, indicating the Standard & Poor’s 500 Index will rebound from its biggest four-week drop since 2009, amid speculation the Federal Reserve will unveil further measures to support the economy.

• Fundamental driver weakness of global economy
• Clear outlook has softened since earlier 2011
• Weak productivity is puzzle in economic recovery
• UK productivity growth has been very weak
• Still significant degree of spare capacity
• Judgement now that policy stance appropriate

• Still see Germany's 2011 real GDP growth at around 3%
• Domestic econ still very robust, external factors weaker

EUR/USD holds around $1.4408. Rate tries to keep above the figure with possible test of resistance/offers at $1.4415/20. Further offers mentioned at $1.4445/55. Bids on $1.4340/20.

European stocks rebounded from a two-year low amid speculation the Federal Reserve may this week signal additional measures to stimulate the economy.
U.S. index futures rose while Asian shares fell.
Eni SpA (ENI) and Petrofac Ltd. (PFC) led a rally in oil companies, both rising more than 3%, amid speculation the civil war in Libya may be drawing to a close.
Petropavlovsk Plc (POG) jumped 5.9% as Citigroup Inc. recommended the gold producer.

EUR/USD
Offers: $1.4415/20, $1.4445/55
Bids: $1.4340/20

GBP/USD
Offers: $1.6520, $1.6540/50
Bids: $1.6460, $1.6445

The yen retreated from record against the dollar and the Swiss franc weakened amid speculation policy makers in both countries will seek to curb gains in their currencies that are hurting exporters.
The yen fell the most in two weeks after Japan’s Finance Minister Yoshihiko Noda said he’s ready to take decisive steps after the currency strengthened to 75.95 against the greenback on Aug. 19.
“One of the big drivers for these two currencies has been the heightened speculation of imminent intervention by the Japanese and Swiss authorities,” said Lee Hardman, a currency strategist at Bank of Tokyo-Mitsubishi UFJ Ltd..
Noda told reporters today he’s become “more concerned about the worsening of the yen’s one-sided movements.” The government will take “bold actions if necessary and won’t rule out any possible options,” he said.
Bank of Japan Deputy Governor Hirohide Yamaguchi said yesterday he was “worrying” about the yen’s gains, noting also that a stronger currency won’t “necessarily” damage the economy.
Gains in the dollar were limited amid speculation Federal Reserve Chairman Ben S. Bernanke will signal at an Aug. 26 conference that the Fed will increase monetary stimulus to boost the economy. The central bank bought $600 billion in Treasuries from November through June in a process known as quantitative easing or QE2.
“The market focus is on Bernanke’s speech this week,” Junichi Ishikawa, a Tokyo-based market analyst at IG Markets Securities Ltd. wrote in a note to clients today. “There may be increasing downward pressure for the dollar, should he mention the possibility of QE3.”


EUR/USD printed lows around $1.4344 before it recovered to $1.4415. It failed to break above the resistance at $1.4410/15 and retreated to the figure.
GBP/USD remains within the $1.6460/$1.6510 range.
USD/JPY rallied to Y77.20 before sharply retreated to Y76.70.

There is no major news on Monday.

AUD/USD back above $1.0400 as euro bounces off semi-official demand around $1.4350. Bids now seen at $1.0350 with more towards the earlier mentioned 200 day MA. Offers now seen towards $1.0440/50.

EUR/USD: $1.4235, $1.4250, $1.4390, $1.4400, $1.4450, $1.4500, $1.4550, $1.4600
USD/JPY: Y76.00, Y76.50, Y77.00, Y77.65
EUR/JPY: Y108.00
GBP/USD: $1.6650
USD/CHF: Chf0.7900
AUD/USD: $1.0550

Friday’s 3.2 per cent fall on the FTSE Asia-Pacific index took the pan-regional gauge back into negative territory for the week – a five-day decline of 2.2 per cent to 230.38.
But the end-of-week fall was less dramatic than the frantic selling seen in the US and Europe on Thursday.
Seoul’s Kospi index was Asia’s worst performer on Friday after tumbling into a bear market from its all-time May high. The benchmark sank the most in almost three years after declining 6.2 per cent to 1,744.88, leaving weekly losses at 2.7 per cent.
Exporters led declines in Seoul with market heavy-weight Samsung Electronics sinking 4.1 per cent to Won709,000 on Friday, although the world’s largest technology company by sales was still left with a weekly gain of 0.3 per cent.
Samsung was lifted earlier in the week on expectations that Google’s $12.5bn deal to buy Motorola Mobility, the US smartphone company, will help protect the Android operating system.
Elsewhere, Hong Kong’s Hang Seng index fell 1.1 per cent over the week to 19,620.01. The Shanghai Composite index was off 2.3 per cent to 2,534.36.
Tokyo’s Nikkei 225 Average retreated 2.7 per cent to 8,719.24 under pressure from the strengthening yen.

Shares in Europe’s banks fell to their lowest in more than two years this week as funding fears hit already stressed markets.
Credit Suisse fell 11.2 per cent to SFr20.96 over the week and domestic rival UBS shed 8.7 per cent lower at SFr10.65.
Deutsche Bank was among the biggest fallers on the Xetra Dax, dropping 10.2 per cent over the week to €27.21.
In France BNP Paribas fell 12 per cent to €32.75 and Société Générale lost 14.1 per cent to €20.87.
Italy’s UniCredit was down 14.8 per cent to €0.90.
The pan-European benchmark, the FTSE Eurofirst 300, fell 6 per cent to 909.79.
Industrial stocks were embattled on worries that the global economy was heading for a double-dip recession.
Carlsberg was the FTSE Eurofirst 300’s biggest faller this week, slumping 24.9 per cent over the five sessions to DKr355.80 after posting a worse than expected drop in second-quarter profit, prompting the company to cut its full-year guidance.
Germany’s biggest steelmakers followed most European companies lower. ThyssenKrupp and Salzgitter lost 15.2 per cent to €20.95 and 15 per cent to €38.24, respectively.
The car industry also took a knock over the week. BMW fell 11.9 per cent to €52.30 and Daimler was 10.7 per cent weaker at €34.73. Italian vehicle makers fell with them – Fiat Industrial lost 17.9 per cent to €5.70, while Fiat dropped 20.1 per cent to €4.14.

The S&P 500 index finished the week down more than 3 per cent, sparked by a sell-off in tech shares and a barrage of bad economic news.
Shares in technology bellwether Hewlett-Packard were trading at their lowest price since 2005 on Friday. The shares were down 20.3 per cent on the day, and 27.3 per cent for the week.
Although HP reported that it topped earnings forecasts for its most recent quarter, it revised its full-year forecast sharply downward.
Dell had also reported disappointing consumer sales earlier this week. Its shares were down 3.6 per cent for the week.
Overall, tech stocks in the S&P 500 index were down 6.3 per cent for the week and the Nasdaq Composite index was off 4.9 per cent for the week to 2,385.71.
After Thursday’s sell-off, on worse than expected results from the Philly Fed business survey and a slowdown in home sales, traders were anxious to see if the broad S&P 500 index would touch the year low of 1,101, set last week.
The broad S&P 500 index was down fractionally for the day on Friday, and down 3.4 per cent for the week at 1,140.08. The blue-chip heavy Dow Jones Industrial Average was down 0.3 per cent on Friday, and off 2.8 per cent for the week at 10,950.24.
Bank of America , among the leading decliners last week, finishing the five days down 2.8 per cent.
Regions Financial , hit lows not seen since 2009, down 4 per cent for the week at $4.14. PNC was down 4.9 per cent at $44.57.
Motorola Mobility was up 54.8 per cent for the week at $37.87, still short of the $40-a-share price Google bid for the mobile phone handset manufacturer earlier this week. Google shares were down 10 per cent for the week at $507.50.

The Swiss franc was in the spotlight last week as the Swiss National Bank stepped up its campaign to weaken its currency.
The franc has been driven to record highs in recent weeks as investors have have sought a haven from the eurozone debt crisis and fears over global growth.
That has alarmed Swiss policymakers, fearful that the strength of their currency could strangle economic growth.
Speculation that the SNB was preparing to intervene directly in the currency market and peg the franc to the euro sent the franc sharply lower early in the week.
The franc rose on Wednesday, however, after the central bank avoided direct action, instead flooding the money market with funds in an effort to drive interest rates lower and rein in what it described as its “massively overvalued” currency.
That still left the franc 2.2% lower against the euro over the week, down 1.1% against the dollar and 2.9% weaker against the pound.
Meanwhile, a fresh slide in global stocks boosted haven demand for the yen, although fears of further intervention by the Japanese authorities to weaken its currency kept its gains in check.
The yen hit a record high of Y75.93 against the dollar on Friday, before pulling back, still up 0.5% on the week.
The dollar came under pressure elsewhere as a plunge in the Philadelphia Fed’s business conditions survey stoked fears that the US economy was headed for recession and raised speculation of a fresh round of quantitative easing from the Federal Reserve.
Over the week, the dollar fell 1.1% against the euro, lost 1.8% against the pound and dropped 0.8% against the Australian dollar.

Japan shares are down in the final hour of trading, with Mazda Motor Corp. as the biggest percentage loser (-4.97%). The loss comes after reports that Goldman Sachs Group lowered its rating of Japan's auto sector to "neutral" from "attractive" last week.
The Nikkei is down 0.75% at 8653.46.

Resistance 3: Y78.20

Resistance 2: Y77.80
Resistance 1: Y77.20

Current price: Y76.72
Support 1:Y75.90              
Support 2:Y75.00
Support 3:Y74.30

Комментарии: Курс откатил от нового сессионного максимума на Y77.20 на фоне сохраняющихся на рынке опасений относительно возможной интервенции. Установленные в пятницу новые исторические минимумы представляют сильную поддержку на  Y75.90. Ниже поддержка расположена на Y75.00. Четкое пробитие этого рубежа откроет путь к Y74.30 (канальная линия от декабря 2008 года). Выше Y77.20 сопротивление представлено Y77.80 (38.2% Фибо падения курса с Y80.20 до Y75.90), далее - на Y78.20.

Resistance 3: Chf0.8140
Resistance 2: Chf0.8010/15
Resistance 1: Chf0.7960
Current price: Chf0.7872
Support 1: Chf0.7790
Support 2: Chf0.7660
Support 3: Chf0.7540

Nikkei   -52.46  (-0.6%)  8,719.24              
DAX  -122.80  (-2.19%)  5,480   
CAC  -59.05  (-1.92%)  3,017              
FTSE-100   -51.47  (-1.01%)  5,041           
Dow   -172.93  (-1.57%)  10,818           
Nasdaq  +10.50  (+0.51%)  2,051.50    
S&P500 -17.12  (-1.50%)  1,124   

Resistance 3: $1.4580
Resistance 2: $1.4500/20         
Resistance 1: $1.4450
Current price: $1.4370
Support 1: $1.4350
Support 2: $1.4330
Support 3: $1.4260

Comments: Rate holds close to support at $1.4350 (50% of Friday's rise). Below there is a chance for a test of $1.4330 (61.8%). Stronger level - at $1.4260 (Friday's low). Resistance is around Friday's high on $1.4450. Stronger resistance comes at $1.4500/20 (channel line from May 04, also Aug 17 high). Further rise may extend to $1.4580 (Jul 04 high).