Daily Forex Fundamentals | Written by Saxo Bank | Jul 29 08 06:35 GMT | Wakeup Call: IMF Comments Cooling Down The Optimists Stocks and the US

Daily Forex Fundamentals | Written by Saxo Bank | Jul 29 08 06:35 GMT |

Stocks and the USD went lower after the bearish IMF comments. Reversal this morning, but for how long? Overnight News Bullets UK GfK Consumer Confidence (Aug) out at 2.1 vs. 3.5 expected. GE CPI North Rhine-West. MoM/YoY (Jul) out at 0.6%/3.3% vs. 0.3%/3.0% prior. NZ Building Permits MoM (Jun) out at -20.1% vs. -42.3% prior. JN Jobless Rate (Jun) out at 4.1% vs. 4.0% expected. JN Job-To-Applicant Ratio (Jun) out at 0.91 as expected. JN Household Spending YoY (Jun) out at -1.8% vs. -2.8% expected. JN Large Retailers' Sales (Jun) out at -3.9% vs. -3.8% expected. JN Retail Trade MoM/YoY (Jun) out at 0.0%/0.3% vs. -0.5%/-0.2% expected. AU Conference Board Leading Index (May) out at -0.1% vs. 0.3% prior. Markets FX: The USD is edging towards its lower band of the range from the past three days. Fixed Income: 10-year contracts coming back strongly on the IMF comments yesterday. Stocks: European session dropping around 1% and US down by 2% on IMF comments. Commodities: Crude Oil and Precious Metals slightly higher on USD weakness. O/N Data Heat map: EU US JP UK SZ AU CA NZ NO SE FR + - - - Calendar Today's Highlights: Time (GMT) Region Release Consensus 07:30 SW Retail Sales MoM/YoY (Jun) 0.0%/0.6% 08:30 UK Net Consumer Credit (Jun) 1.0B 08:30 UK Net Lending Sec. on Dwellings (Jun) 3.7B 08:30 UK Mortgage Approvals (Jun) 37K 12:00 GE IFO July Business Climate Survey 13:00 US S&P / CaseShiller Home Price Index (May) 13:00 US S&P / CaseShiller Composite-20 YoY (May) -16.0% 14:00 US Consumer Confidence (Jul) 50.1 21:00 US ABC Consumer Confidence (Jul 27) 23:50 JN Industrial Production MoM/YoY (Jun P) -1.7%/0.6% This and Next Week's Highlights: Date Region Release Jul 30 AU Building Approvals Jul 30 NZ Money Supply Jul 30 E-Z A string of Euro-Zone confidence figures Jul 30 SZ KOF Swiss Leading Indicator Jul 30 US MBA Mortgage Applications, ADP Employment Change, DOE/API Inventories Jul 30 CA Industrial Product Price, Raw materials Price Index Jul 30 UK GfK Consumer Confidence Survey Jul 31 AU Trade Balance, Retail Sales, Private Sector Credit Jul 31 JN Labor Cash Earnings, Housing Starts, Annualized Housing starts Jul 31 NZ NBNZ Business Confidence Jul 31 SZ CPI Jul 31 UK Nat'wide House Prices Jul 31 SE Consumer Confidence, Manufacturing Confidence Jul 31 GE Unemployment Change, Unemployment Rate Jul 31 NO Unemployment Rate, Credit Indicator Growth Jul 31 E-Z Euro-Zone CPI, Euro-Zone Unemployment Rate Jul 31 CA GDP Jul 31 US Personal Consumption, GDP Price Index, Core PCE, Employment Cost Index, Initial Jobless Claims, Continuing Claims, Chicago Purchasing Manager index, NAPM-Milwaukee, EIA Natural Gas Storage Change, Paulson Speaks on Markets What's going on? After a weak U.S. Monday session, Asian stocks continued to slide, with the regional stocks reaching lowest level in a week. Week forecasts from Toyota and Singapore Airlines has now been added to existing concerns of slowing growth and elevated energy prices. Highlighting the on-going housing woes in the U.S., IMF has stated yesterday that no end was in sight for the housing recession and warned that worsening credit crisis would prolong the slowdown in economic growth. The median surveyed expectation for the U.S. July Consumer Confidence, scheduled for a release at 14:00 GMT today is currently at 50.4 index value. If materialized, this release would represent another 16-yr low. The wide spectrum of estimates for today's release range from a low of 45.0 to a high of 55.0. FX EURUSD to break higher... EUR USD JPY GBP CHF AUD CAD NZD NOK SEK PLN + - + FX Trading Strategies Pair Supp. Resis. Comments EURUSD 1.5730 1.5815 With broad equity losses keeping the USD on the offer, we place an order to buy 1.5761 bid. We will keep a stop loss at 1.5740 offered. Target is open but initially we'll be eyeing the break of 1.5810 level. Equities IMF & Merril Lynch Put A Combined Pressure On The Financial Sector Equities: We expect the European markets to open 0.8% lower Tuesday. The US stock indices lost 1.2% after the close in Europe but the S&P 500 future gained slightly. The main driver for the drop remained the financials with a drop of 1.7% after the International Monetary Fund said there is no end in sight to the housing slump and that the worsening credit conditions may prolong the economic slowdown. On top of that Merrill Lynch announced after the close of the U.S. session further writedowns of USD 5.7 billion in Q3 and plans to raise USD 8.5 billion by selling shares in a public offering. This will push the financials down on rising concerns of future capital increases. We recommend shorting Barclays, UBS, ING, DEXIA and Deutsche Bank. Trade Idea (Equities - TrendSpotter - Sell Danone (DANO:xpar): The current rebound in the French food producer is starting to look exhausted, and probable to return to the longer term down trend, a break of 48.70 would be a confirmation of a new wave down. We place an order to sell at 48.70 with a stop at 49.70 initially targeting a test of the support at 46.00. DAX UKX CAC OMX KFX OBX SMI NDX DJI SPX NKY - - - - - - - - - - - Equity Index Levels Analysis Disclosure & Disclaimer Saxo Bank A/S shall not be responsible for any loss arising from any investment based on any recommendation, forecast or other information herein contained. The contents of this publication should not be construed as an express or implied promise, guarantee or implication by Saxo Bank that clients will profit from the strategies herein or that losses in connection therewith can or will be limited. 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