Wakeup Call: TRY Strengthening Massively After The Supreme Court Didn't Dissolve The Leading AK Party

Daily Forex Fundamentals | Written by Saxo Bank | Jul 31 08 06:46 GMT |

USDTRY four figures lower. Stocks going higher in another wave of optimism. EURUSD staying unchanged, below 1.56. Overnight News Bullets SW Non-Manual Workers Wages YoY (May) out at 3.4% vs. 3.1% prior. E-Z A streak of Retail PMI's showing slight improvement from June. E-Z Confidence Indicators generally worse than expected. SZ KOF Swiss Leading Indicator (Jul) out at 0.9 vs. 0.95 expected. US ADP Employment Change (Jul) out at 9K vs. -60K expected. CA Industrial Product Price MoM (Jun) out at 1.3% vs. 1.0% expected. CA Raw Materials Price Index (Jun) out at 4.4% vs. 3.5% expected. US DOE/API Energy Storage figures generally showing bigger than expected draws. UK GfK Consumer Confidence (Jul) out at -39 vs. -37 expected. AU Retail Sales (Jun) out at -1.0% vs. 0.0% expected. AU Retail Sales Ex Inflation (2Q) out at -0.6% vs. -0.1% expected. AU Trade Balance (Jun) out at 411M vs. -100M expected. AU Private Sector Credit MoM/YoY (Jun) out at 0.4%/11.7% vs. 0.6%/12.1% expected. JN Labor Cash Earnings YoY (Jun) out at -0.6% vs. 0.6% expected. NZ NBNZ Business Confidence (Jul) out at -43.2 vs. -39.7 prior. JN Housing Starts YoY (Jun) out at -16.7% vs. -17.8% expected. SZ CPI MoM/YoY (Jul) out at -0.4%/3.1% vs. -0.4%/3.0% expected. GE ILO Unemployment Rate (Jun) out at 7.3% vs. 7.4% expected. UK Nat'wide House Prices MoM/YoY (Jul) out at -1.7%/-8.1% vs. -1.2%/-7.3% expected. Markets FX: EURUSD still staying below 1.56. Fixed Income: Bunds rallying, but Treasuries staying in the range. Stocks: Massive strength in European and US sessions. Nikkei about unchanged. Commodities: Decent rally in Crude Oil. Precious metals slightly higher. 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 07:15 SW Consumer Confidence (Jul) -12.0 07:15 SW Manufacturing Confidence (2Q) -1.0 07:55 GE Unemployment Change (Jul) -20K 07:55 GE Unemployment Rate (Jul) 7.8% 08:00 NO Unemployment Rate (Jul) 1.8% 08:00 NO Credit Indicator Growth (Jun) 13.8% 09:00 E-Z Euro-Zone CPI Estimate (Jul) 4.1% 09:00 E-Z Euro-Zone Unemployment Rate (Jun) 7.2% 12:30 CA Gross Domestic Product (May) 0.2% 12:30 US GDP QoQ Annualized (2Q A) 2.3% 12:30 US Personal Consumption (2Q A) 1.7% 12:30 US GDP Price Index (2Q A) 2.4% 12:30 US Core PCE QoQ (2Q A) 2.0% 12:30 US Employment Cost Index (2Q) 0.7% 12:30 US Initial Jobless Claims (Jul 26) 393K 12:30 US Continuing Claims (Jul 19) 3150K 13:45 US Chicago PMI (Jul) 49.0 14:00 US NAPM-Milwaukee (Jul) 43.5 14:35 US EUA Natural Gas Storage Change (Jul 25) 70 17:00 US Paulson Speaks on Markets and the Economy This and Next Week's Highlights: Date Region Release Aug 1 GE Retail Sales Aug 1 SW GDP Aug 1 NO Unemployment Rate Aug 1 UK PMI Manufacturing Aug 1 E-Z PMI Manufacturing Aug 1 US Change in Nonfarm Payrolls, Unemployment Rate, Change in Manufact. Payrolls, Average Hourly Earnings, ISM Manufacturing, ISM Prices Paid, Construction Spending, Baker Hughes U.S. Rig Count. What's going on? The Federal Reserve will be able to lend more easily to failed banks under government control because of a provision in legislation that bailed out Fannie Mae and Freddie Mac. In the rescue signed into law by President George W. Bush yesterday, the Fed will no longer have to pay penalties on loans it makes to institutions taken over by the Federal Deposit Insurance Corp. Australia may be headed for a housing recession similar to those roiling the U.S. and U.K. The cause is a combination of rising default rates, the biggest drop in home prices in five years, the highest borrowing costs in a decade and slowing economic growth. Asian Stocks gain, led by BHP on higher oil and commodity prices. Japanese car producer try to grow in emerging markets to counter the increasing costs for steel and other raw materials. TRY a lot stronger after the supreme court did not dissolve the leading AK Party. FX EURPLN to continue trending lower... EUR USD JPY GBP CHF AUD CAD NZD NOK SEK PLN + - - - FX Trading Strategies Pair Supp. Resis. Comments EURPLN 3.20 3.2250 With the pair attempting to break the key support at 3.20, we have placed an order to sell 3.2015 offered. If done, our stop loss is set 3.2215 bid. Target is left open, but we will looking for the 3.14 area. Event risk is today's announcement by the Polish central bank's statement today regarding y'day's rate decision. Equities A Somewhat Positive Sentiment Persists, Before A Quite Data Heavy Day Equities: We expect European markets to rise 0.5% at the opening on Thursday. U.S. stock indices have gained 0.7% after the close in Europe and the S&P 500 future is only slightly down. The main driver for the gains in the late hours of the U.S. trading session a 3.5% jump in the crude oil price after a report showed that gasoline inventories has declined. Consequently the U.S. energy and material sector closed around 2.5% higher after the close in Europe. We expect to see oil producers like Royal Dutch Shell, BP, ENI and Statoilhydro to benefit from this today. Be aware that a couple of these stocks will publish earnings Thursday. The jump in the oil price will lead the airlines down today. Favorite short candidates are Ryanair, British Airways, Air France KLM. Trade Idea (Equities - TrendSpotter - Sell Nestle (NESN:xvtx): The current rebound in the Swiss food manufacturer is starting to look exhausted, and probable to return to the longer term down trend, a break of 46.50 would be a confirmation of a new wave down. We place a stop sell order 46.30, our target is initially 44, we will keep a stop at 47.00. DAX UKX CAC OMX KFX OBX SMI NDX DJI SPX NKY (+) (+) (+) (+) (+) (+) (+) Equity Index Levels Futures Oil: Strong bounce from $120, more to follow? Buy Crude Oil (clu8) @ $126.30/125.20 area with a stop above 124.80, target $130.00 Crude strong bounce from the 120.00 area yesterday was mainly technical. The trigger was a bigger draw than expected on Gasoline but after a 20% correction in two weeks some technical rebound was due among oversold conditions. The 130-135 area should be first a strong resistance. Bunds US 10-Yr Crude Oil Silver Gold Gilts JGBs Euribor + + + + 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. 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