Wakeup Call: While We Are Waiting For US Unemployment Figures

Daily Forex Fundamentals | Written by Saxo Bank | May 08 09 06:48 GMT |

The stress test release from yesterday did not reveal anything that the market did not know. Today's unemployment figures will be decisive for equity market sentiment weeks ahead Calendar Economic Data Releases Country Name Time (GMT) Expectation Prior Comment GE 10:00 Industrial Production MoM (MAR) -1.3% -2.9% US 12:30 Change in Non-farm Payrolls (APR) -600K -663K US 12:30 Unemployment Rate (APR) 8.9% 8.5% What's going on? The stress test on US banks was released yesterday and nothing much new information was revealed. BofA need $34 bln., Wells Fargo $13.7 bln and CitiGroup $5.5 bln. The major issue is still whether the assumptions underlying the stress test regarding the worst case scenario is realistic. ECB cut interest rates to 1% and announced that it wants to buy debt and bunds were heading lower on this. BoE announced that it will have another go of buying debt despite that the prior attempt did not have any long lasting effect on the curve. Watch out for Non-farm payrolls and Unemployment rate from the US today. Definitely today's most important event and will move markets Toyota was out with a loss at 436.93 bln. Yen vs. a profit of 1.72 TN Yen last year. Cuts dividend by 50% and present a very bleak outlook for 2009. FX FX Daily stance Comment EURUSD 0/- Rally can extend to 1.3470 high, but would sell there for re-test of 1.3330-40 EURJPY 0/- 200-day MA suppt holds at 132.40. Seen ranging 132.30-133.80 USDJPY 0/- Looking for a re-test of 99.60, but seen holding for retracement to 98.80-00 GBPUSD 0/- Prefer downside while below 1.5060. Suppt still 1.4960 AUDUSD 0 Still firm but looking tired. May halt at 0.7580-90 temporarily. Suppt at 0.7475-80 Equities Equities Daily stance Comment DAX 0/+ Buy at the break of 4835 targeting 4900. S/L below 4790. FTSE 0/+ Buy at the break of 4424 targeting 4490. S/L below 4380. S&P500 0/+ Buy at the break of 910 targeting 920. S/L below 905. Nasdaq100 0/+ Nikkei225 0/+ Futures Commodities Daily Stance Comment Gold(XAUUSD) 0 Likely suppted at 905. Next res at 925 Silver(XAGUSD) 0/+ Buy dips to 13.75 for a push back abv 14.0 Oil (CLM9) 0/+ Further upside potential to 60+. Buy dips to 56.0, stop below 53.40 FX Options FX-Options Comment EURUSD Buyers of shortdate starting to appear in both directions as the market looks nervous. Spot likely to be choppy over the next few sessions. USDJPY Market is finding buyers along the middle of the curve even though spot is largely rangebound. 6m atms saw an aggressive buyer, also buyers of shortdate downside. AUDUSD Sellers of topside persists and the rest of the curve follows slightly lower. Today's session saw a few buyers of low delta downside. 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. Trades in accordance with the recommendations in an analysis, especially leveraged investments such as foreign exchange trading and investment in derivatives, can be very speculative and may result in losses as well as profits, in particular if the conditions mentioned in the analysis do not occur as anticipated. Saxo Bank utilizes financial information providers and information from such providers may form the basis for an analysis. Saxo Bank accepts no responsibility for the accuracy or completeness of any information herein contained. Any recommendations and other comments in Saxo Bank's analysis derive from objective fundamental macro economical and company specific calculations, statistical and technical analysis, and subjective general market assessment. If an analysis contains recommendations to buy or sell a specific financial instrument, such recommendation should be seen as Saxo Bank's opinion that the specific instrument will respectively outperform the relevant market or underperform compared to the market. Saxo Bank's recommendations should statistically correspond to an even distribution between buy and sell recommendations. The recommendations may expire promptly due to market volatility and in general, Saxo Bank does not anticipate its recommendations to be valid more than one month. An analysis will be updated if and only if a market development or other issues relevant to the analysis render a new analysis on the same topic relevant. Saxo Bank's analysis does not cover any specific financial product over time but only products which Saxo Bank's strategy team finds it important to cover at any given point in time. In order to prevent conflicts of interest, Saxo Bank has established appropriate business procedures, incl. procedures applicable to research and analysis to ensure objective research reports. Saxo Bank's research reports have not been discussed with the parties, e.g. issuers of securities, mentioned in the analysis. Saxo Bank is under supervision by the Danish Financial Supervisory Authority. Saxo Bank does not engage in corporate finance activities and accordingly, Saxo Bank's employees, incl. the persons responsible for an analysis, do not receive remuneration associated with investment banking transactions.