By Agnes Lovasz and Ron Harui
Sept. 12 (Bloomberg) -- The yen fell against the euro and the dollar on speculation that Lehman Brothers Holdings Inc. will find a buyer, giving investors confidence to purchase higher-yielding assets funded in the Japanese currency.
The yen snapped four days of gains against the euro amid optimism a government-brokered takeover of the New York-based bank will support credit markets. U.S. officials, who are helping Lehman identify potential acquirers, may announce a deal before Asian markets open on Sept. 15, according to a person with knowledge of the matter. The euro rose against the dollar.
The yen dropped to 151.26 per euro as of 8:34 a.m. in London, from 149.98 in New York yesterday, when it reached 147.54, the highest level since Aug. 11, 2006. It fell to 107.54 per dollar from 107.17. The euro rose to $1.4066, after touching $1.3882 yesterday, the weakest since Sept. 18 last year.
``We're seeing a stabilization of risk appetite so near- term gains are developing for euro-dollar and the yen is coming under pressure,'' said Ian Stannard, a London-based currency strategist for BNP Paribas SA, the most accurate currency forecaster in a 2007 survey by Bloomberg. ``Dollar-yen is regaining a little bit of ground and we might see a more sustained move higher developing.''
The U.S. currency dropped to $1.7661 against the British pound from $1.7580, and was at 1.1360 Swiss francs from 1.1381.
Reviewing Books
The U.S. government isn't likely to contribute money in any Lehman deal, the person with knowledge of the matter said. Bankers from other firms were reviewing Lehman's books today, according to people familiar with the matter. They declined to identify potential acquirers.
``There's likely to be a buyer somewhere for Lehman,'' said Lee Wai Tuck, a currency strategist at Forecast Pte Ltd. in Singapore. ``Risk appetite may improve a bit. The yen could be sold.''
The MSCI Asia-Pacific Index of regional shares advanced 0.9 percent after the Standard & Poor's 500 Index rose 1.4 percent yesterday.
Investors increased carry trades, in which they get funds in a country with low borrowing costs and invest in one with higher interest rates, earning the spread between the borrowing and lending rate. The risk is that currency market moves erase those profits.
The benchmark interest rate is 0.5 percent in Japan, compared with 4.25 percent in the 15-nation euro region, 7 percent in Australia and 7.5 percent in New Zealand, making the yen a popular target for so-called carry trades.
Dollar Index
The ICE's Dollar Index touched 80.375 yesterday, the highest level since September 2007, when the Fed began cutting the target lending rate from 5.25 percent to 2 percent to stave off a recession. The index, a gauge measuring the dollar against the currencies of six U.S. trading partners, reached a low of 70.698 on March 17.
The dollar strengthened beyond 1.80 versus the Brazilian real yesterday for the first time since January and reached $1.7447 against the pound, the strongest level since April 2006.
The dollar has gained more than 12 percent since touching the all-time low of $1.6038 per euro on July 15 as the European economy slumped and crude oil dropped more than 30 percent to $101.38 a barrel from its peak of $147.27.
Industrial output in the 15 nations that use the euro probably fell 0.2 percent in July after a drop of the same amount in the previous month, according to the median forecast of 31 economists surveyed by Bloomberg News. The report from the European Union's statistics office is due today.
``We're looking at a much weaker level for the euro over the next year,'' said Marc Chandler, global head of currency strategy at Brown Brothers Harriman & Co., in an interview on Bloomberg Television. ``Europe, Japan and Asia can't have strong growth with the U.S. so weak. The decoupling story is a mirage.''
To contact the reporters on this story: Agnes Lovasz in London at alovasz@bloomberg.net; Ron Harui in Singapore at rharui@bloomberg.net
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Friday, September 12, 2008
Copper May Have First Weekly Gain in Three on Arbitrage Trading
By Li Xiaowei
Sept. 12 (Bloomberg) -- Copper gained for a third day in London, heading for the first weekly gain in three, as investors step up arbitrage trading to take advantage of the price gap between London and Shanghai.
Copper has fallen 22 percent from the July peak of $8,940 a ton in London, as increasing stockpiles signaled weaker demand and a rebound in the U.S. currency reduced dollar-priced investments. Shanghai prices have declined 13 percent
``The price gap provides opportunities for arbitrage,'' or buying London and selling Shanghai, Wang Zhouyi, an analyst at China International Futures (Shanghai) Co., said today by phone from Shanghai. ``Yet strength in the dollar may impede the arbitrage because it reduces appeal of commodities investments.''
Copper for three-month delivery rose as much as 0.7 percent to $6,980 a ton on the London Metal Exchange and traded at $6,961 at 10:10 a.m. in Shanghai. Metal for December delivery rose 1.5 percent to $55,380 yuan ($8,091) a ton on the Shanghai Futures Exchange at the same time.
The U.S. currency was little changed from yesterday, after touching $1.3882, the strongest level since Sept. 18, 2007.
Among LME-traded metals, aluminum was 0.2 percent up at $2,625 a ton, zinc dropped 0.6 percent to $1,784, tin declined 1.5 percent to $18,500, lead and nickel were un-traded in Asia after settling at $1,855 and $18,500 yesterday.
To contact the reporter for this story: Li Xiaowei in Shanghai at Xli12@bloomberg.net
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Sept. 12 (Bloomberg) -- Copper gained for a third day in London, heading for the first weekly gain in three, as investors step up arbitrage trading to take advantage of the price gap between London and Shanghai.
Copper has fallen 22 percent from the July peak of $8,940 a ton in London, as increasing stockpiles signaled weaker demand and a rebound in the U.S. currency reduced dollar-priced investments. Shanghai prices have declined 13 percent
``The price gap provides opportunities for arbitrage,'' or buying London and selling Shanghai, Wang Zhouyi, an analyst at China International Futures (Shanghai) Co., said today by phone from Shanghai. ``Yet strength in the dollar may impede the arbitrage because it reduces appeal of commodities investments.''
Copper for three-month delivery rose as much as 0.7 percent to $6,980 a ton on the London Metal Exchange and traded at $6,961 at 10:10 a.m. in Shanghai. Metal for December delivery rose 1.5 percent to $55,380 yuan ($8,091) a ton on the Shanghai Futures Exchange at the same time.
The U.S. currency was little changed from yesterday, after touching $1.3882, the strongest level since Sept. 18, 2007.
Among LME-traded metals, aluminum was 0.2 percent up at $2,625 a ton, zinc dropped 0.6 percent to $1,784, tin declined 1.5 percent to $18,500, lead and nickel were un-traded in Asia after settling at $1,855 and $18,500 yesterday.
To contact the reporter for this story: Li Xiaowei in Shanghai at Xli12@bloomberg.net
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Rubber Gains First in Four Days as Oil Boosts Rival's Cost
By Aya Takada
Sept. 12 (Bloomberg) -- Natural rubber futures gained for the first time in four days as oil rose on concern a hurricane may disrupt supply, boosting the cost of making rival synthetic products used in vehicle tires.
Futures in Tokyo climbed as much as 0.7 percent after reaching a three-week low yesterday. Crude oil in New York advanced from a five-month low as Hurricane Ike headed toward a near-direct hit on Houston, the busiest U.S. refining center.
``A rally in oil and other industrial commodities spurred investors to buy back rubber,'' Jun Nishimuta, an analyst at Kanetsu Asset Management Co. in Tokyo, said today by phone.
Rubber for February delivery added 0.4 percent to 302.7 yen a kilogram ($2,824 a metric ton) on the Tokyo Commodity Exchange at the 11 a.m. local time break.
Futures reached a 28-year high at 356.9 yen on June 30, when record oil prices spurred investors to buy commodities as an inflation hedge. Prices lost 2 percent this year.
Gains were limited by concern slowing global economies may weaken demand for the raw material, Nishimuta said. Japan's economy contracted more than the government initially estimated last quarter after figures showed businesses cut spending.
Gross domestic product shrank an annualized 3 percent in the three months ended June 30, Japan's Cabinet Office said today. It was more than the 2.4 percent drop reported last month.
China's passenger-car sales fell in August for the first time in more than three years as the Beijing Olympics and a slumping stock market delayed purchases, the China Association of Automobile Manufacturers said on Sept. 9. China is the world's biggest rubber user.
November-delivery rubber on the Shanghai Futures Exchange, the most-active contract, rose 0.6 percent to 22,225 yuan ($3,246) a ton at 10:15 a.m. local time.
To contact the reporters on this story: Aya Takada in Tokyo atakada2@bloomberg.net
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Sept. 12 (Bloomberg) -- Natural rubber futures gained for the first time in four days as oil rose on concern a hurricane may disrupt supply, boosting the cost of making rival synthetic products used in vehicle tires.
Futures in Tokyo climbed as much as 0.7 percent after reaching a three-week low yesterday. Crude oil in New York advanced from a five-month low as Hurricane Ike headed toward a near-direct hit on Houston, the busiest U.S. refining center.
``A rally in oil and other industrial commodities spurred investors to buy back rubber,'' Jun Nishimuta, an analyst at Kanetsu Asset Management Co. in Tokyo, said today by phone.
Rubber for February delivery added 0.4 percent to 302.7 yen a kilogram ($2,824 a metric ton) on the Tokyo Commodity Exchange at the 11 a.m. local time break.
Futures reached a 28-year high at 356.9 yen on June 30, when record oil prices spurred investors to buy commodities as an inflation hedge. Prices lost 2 percent this year.
Gains were limited by concern slowing global economies may weaken demand for the raw material, Nishimuta said. Japan's economy contracted more than the government initially estimated last quarter after figures showed businesses cut spending.
Gross domestic product shrank an annualized 3 percent in the three months ended June 30, Japan's Cabinet Office said today. It was more than the 2.4 percent drop reported last month.
China's passenger-car sales fell in August for the first time in more than three years as the Beijing Olympics and a slumping stock market delayed purchases, the China Association of Automobile Manufacturers said on Sept. 9. China is the world's biggest rubber user.
November-delivery rubber on the Shanghai Futures Exchange, the most-active contract, rose 0.6 percent to 22,225 yuan ($3,246) a ton at 10:15 a.m. local time.
To contact the reporters on this story: Aya Takada in Tokyo atakada2@bloomberg.net
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Soybeans Rise on Speculation Shipping Cost Drop May Spur Demand
By Sungwoo Park and Jae Hur
Sept. 12 (Bloomberg) -- Soybeans gained for the first time in three days amid speculation that falling freight costs may spur demand and U.S. farmers may harvest less of the crop than the government forecast last month. Wheat advanced.
The Baltic Dry Index, a measure of shipping costs for commodities, fell yesterday to its lowest since March 2007. The U.S. Department of Agriculture today will project a soybean crop of 2.955 billion bushels, according to the average estimate of 24 analysts surveyed. That's down 0.6 percent from the USDA's August estimate.
``Freight rates have come down significantly,'' Nicholas Chung, senior manager of the commodity derivatives team at state-run Korea Development Bank, said in Seoul. ``There'll be plenty of ships out there, which will cut shipping costs for buyers, especially those who have shied away from U.S. grains because of high prices.''
Soybeans for November delivery gained as much as 16.25 cents, or 1.4 percent to $11.9225 a bushel in after-hours trading on the Chicago Board of Trade and were at $11.88 by 2:16 p.m. Singapore time. Futures, which touched a five-month low of $11.57 on Sept. 9, have slid 27 percent from a record $16.3675 on July 3.
The Baltic Dry Index of costs for international trade routes shed 133 points, or 2.7 percent, to 4,893 points, according to the Baltic Exchange in London yesterday. That was the 17th straight decline and marked a 46 percent slide for the year.
Corn for December delivery was up 0.25 cent at $5.335 a bushel after declining in the past three sessions. The futures have fallen 33 percent from a record $7.9925 on June 27.
Australian Wheat
The U.S. corn harvest will total 12.126 billion bushels, according to the survey, down 1.3 percent from the USDA's August estimate. Last year's harvest totaled 13.074 billion bushels after farmers increased planted acreage to a 63-year high.
Australia, the world's sixth-largest wheat exporter, may harvest 21 million metric tons of wheat, less than previously forecast 20 million to 24 million tons, because of dry weather, Rabobank Group said today. Output may drop as low as 19 million tons without normal rainfall and may still reach 23 million, the bank said. Last year's crop was 13 million tons.
Wheat for December delivery advanced as much as 7.75 cents, or 1.1 percent, to $7.34 a bushel and last traded at $7.325. Futures, which yesterday slipped to as low as $7.14, the lowest since Aug. 29, 2007, have fallen 46 percent below the $13.495 record set in February.
To contact the reporters on this story: Sungwoo Park in Seoul at spark47@bloomberg.net; Jae Hur in Singapore at jhur1@bloomberg.net
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Sept. 12 (Bloomberg) -- Soybeans gained for the first time in three days amid speculation that falling freight costs may spur demand and U.S. farmers may harvest less of the crop than the government forecast last month. Wheat advanced.
The Baltic Dry Index, a measure of shipping costs for commodities, fell yesterday to its lowest since March 2007. The U.S. Department of Agriculture today will project a soybean crop of 2.955 billion bushels, according to the average estimate of 24 analysts surveyed. That's down 0.6 percent from the USDA's August estimate.
``Freight rates have come down significantly,'' Nicholas Chung, senior manager of the commodity derivatives team at state-run Korea Development Bank, said in Seoul. ``There'll be plenty of ships out there, which will cut shipping costs for buyers, especially those who have shied away from U.S. grains because of high prices.''
Soybeans for November delivery gained as much as 16.25 cents, or 1.4 percent to $11.9225 a bushel in after-hours trading on the Chicago Board of Trade and were at $11.88 by 2:16 p.m. Singapore time. Futures, which touched a five-month low of $11.57 on Sept. 9, have slid 27 percent from a record $16.3675 on July 3.
The Baltic Dry Index of costs for international trade routes shed 133 points, or 2.7 percent, to 4,893 points, according to the Baltic Exchange in London yesterday. That was the 17th straight decline and marked a 46 percent slide for the year.
Corn for December delivery was up 0.25 cent at $5.335 a bushel after declining in the past three sessions. The futures have fallen 33 percent from a record $7.9925 on June 27.
Australian Wheat
The U.S. corn harvest will total 12.126 billion bushels, according to the survey, down 1.3 percent from the USDA's August estimate. Last year's harvest totaled 13.074 billion bushels after farmers increased planted acreage to a 63-year high.
Australia, the world's sixth-largest wheat exporter, may harvest 21 million metric tons of wheat, less than previously forecast 20 million to 24 million tons, because of dry weather, Rabobank Group said today. Output may drop as low as 19 million tons without normal rainfall and may still reach 23 million, the bank said. Last year's crop was 13 million tons.
Wheat for December delivery advanced as much as 7.75 cents, or 1.1 percent, to $7.34 a bushel and last traded at $7.325. Futures, which yesterday slipped to as low as $7.14, the lowest since Aug. 29, 2007, have fallen 46 percent below the $13.495 record set in February.
To contact the reporters on this story: Sungwoo Park in Seoul at spark47@bloomberg.net; Jae Hur in Singapore at jhur1@bloomberg.net
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Copper May Decline Next Week on Demand Concern, Survey Says
By Chanyaporn Chanjaroen
Sept. 12 (Bloomberg) -- Copper may fall next week as global economic growth cools, reducing demand for industrial metals.
Nine of 16 analysts and traders surveyed yesterday and Sept. 10 forecast copper will drop next week. Five expected an increase and two were neutral. Copper for delivery in three months on the London Metal Exchange has risen 1.2 percent this week.
The euro-area economy contracted in the second quarter and U.S. jobless claims reached the highest since October 2003.
This week's survey results:
Bullish: 5 Bearish: 9 neutral: 2
To contact the reporter on this story: Chanyaporn Chanjaroen in London at cchanjaroen@bloomberg.net
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Sept. 12 (Bloomberg) -- Copper may fall next week as global economic growth cools, reducing demand for industrial metals.
Nine of 16 analysts and traders surveyed yesterday and Sept. 10 forecast copper will drop next week. Five expected an increase and two were neutral. Copper for delivery in three months on the London Metal Exchange has risen 1.2 percent this week.
The euro-area economy contracted in the second quarter and U.S. jobless claims reached the highest since October 2003.
This week's survey results:
Bullish: 5 Bearish: 9 neutral: 2
To contact the reporter on this story: Chanyaporn Chanjaroen in London at cchanjaroen@bloomberg.net
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Oil Rises From 5-Month Low as Hurricane Ike Heads for Houston
By Christian Schmollinger
Sept. 12 (Bloomberg) -- Crude oil rose from a five-month low as Hurricane Ike headed toward a near-direct hit on Houston, the busiest U.S. refining center.
About 16 percent of U.S. processing capacity is being shut before Ike makes landfall tomorrow. The Gulf Coast region is home to 26 percent of U.S. oil production. Evacuations have shut 97 percent of Gulf crude production and 93 percent of natural gas output, the Minerals Management Service said yesterday.
``It is having a disruptive effect on production at the moment,'' said David Moore, a commodity strategist at Commonwealth Bank of Australia in Sydney. ``The biggest effect on the price now is that there is so much output shut-in.''
Crude oil for October delivery rose as much as 82 cents, or 0.8 percent, to $101.69 a barrel on the New York Mercantile Exchange. It was at $101.30 a barrel at 2:33 p.m. in Singapore. Prices are up 27 percent from a year ago. Yesterday, futures fell $1.71, or 1.7 percent, to $100.87 a barrel, the lowest settlement price since March 24.
Gasoline for October delivery gained as much as 4.02 cents, or 1.5 percent, to $2.7890 a gallon in New York after rising 3.3 percent yesterday, the biggest one-day gain since Aug. 27. Heating oil climbed as much as 4.95 cents, or 1.7 percent, to $2.9650 a gallon, having risen 0.5 percent yesterday.
Oil is set for its second weekly decline, dropping 4.5 percent this week as the dollar surged to its strongest level against the euro in a year, reducing the appeal of commodities.
Dollar Gains
The U.S. currency climbed 0.4 percent to $1.3946 per euro, from $1.3998 on Sept. 10, after touching $1.3882, the strongest level since Sept. 18, 2007.
``A lot of this is tied to the strong U.S. dollar,'' said Commonwealth Bank's Moore. ``That's a factor that's contributed to the lower oil price.''
Ike's eye was 300 miles (485 kilometers) southeast of Galveston, Texas, and moving west-northwest at 12 miles per hour, the National Hurricane Center said in an advisory at 10 p.m. Houston time. It strengthened to a Category 2 hurricane with sustained winds of 100 mph, up from 80 mph Sept. 10.
Exxon Mobil Corp.'s Baytown refinery, the country's biggest, with a capacity of 590,500 barrels of crude oil a day, is in a mandatory evacuation area and the company has begun shutting the facility, according to an advisory on its Web site.
Refinery Closures
Valero Energy Corp., the largest U.S. refiner, said it shut three Texas oil refineries with a combined capacity of 700,000 barrels a day because of the danger posed by Hurricane Ike.
Valero will close its 325,000 barrel-a-day Port Arthur, Texas, refinery, a Texas City plant with a capacity of 245,000 barrels and a Houston facility which can process 130,000 barrels, spokesman Bill Day said in an e-mail. Valero's other Gulf Coast refineries are operating at planned rates.
BP Plc is closing its Texas City refinery because of Ike, Scott Dean, a company spokesman, said in a telephone interview. Texas City has a 475,000 barrel-a-day capacity.
Gulf operators have evacuated workers from 78 percent of production platforms, the Minerals Management Service said on its Web site yesterday. That is about 1.3 million barrels a day of oil and 7.4 billion cubic feet a day of gas.
Venezuela Threatens
Venezuelan President Hugo Chavez yesterday ordered the American ambassador to Caracas to leave and threatened to halt oil exports to the U.S. in a show of solidarity with his Bolivian counterpart Evo Morales.
Chavez and Morales, who expelled the top U.S. envoy from his country two days ago, have accused the U.S. of backing opposition movements in their countries.
Chavez, a self-proclaimed socialist who refers to America as an ``empire,'' threatened to halt Venezuelan oil shipments to the U.S. if it attacks his country. Venezuela is the fourth- biggest supplier of foreign crude oil to America.
CME Group Inc., the world's biggest futures exchange, is extending New York Mercantile Exchange electronic trading hours this weekend because of Ike.
The decision applies to energy trades on its ClearPort and Globex trading platforms, CME said in a release yesterday. Trading will begin at 10 a.m. New York time on Sept. 14 with the session closing on Sept. 15. Trading normally opens at 7 p.m.
Brent oil for October settlement rose as much as 81 cents, or 0.8 percent, to $98.45 a barrel on London's ICE Futures Europe exchange. It was at $98.07 at 2:38 p.m. Singapore time.
The contract yesterday declined $1.33, or 1.3 percent, to settle at $97.64 a barrel, the lowest since March 4. The futures had dropped 11 straight days, the longest stretch since the contract was introduced in 1988.
Cracks Improve
The refinery closures after Hurricane Gustav led to a decline in U.S. gasoline stocks of 6.5 million barrels, or 3.3 percent, last week, the Energy Department said Sept. 10. This puts supplies 9.3 million barrels below their 5 year average, according to a report by Barclays Capital analysts.
Refinery capacity utilization fell to 78.3 percent last week from 88.7 percent the previous week, the Department said.
The lower stockpiles have led to an increase in the gasoline crack margin, or the price difference between the motor fuel and crude oil. The crack has more than tripled since Sept. 1, when Gustav made landfall, to $15.50 a barrel today.
``Once the storm passes it's very likely you'll see a lifting in refinery rates because obviously the disruption to activity caused by the storm suggests we'll get a drawdown in stocks,'' said Commonwealth's Moore.
To contact the reporter on this story: Christian Schmollinger in Singapore at christian.s@bloomberg.net
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Gold Headed for Second Weekly Decline as Dollar Climb Continues
By Feiwen Rong
Sept. 12 (Bloomberg) -- Gold headed for the second weekly decline on concern the dollar's climb to the highest in a year against the euro would erode the precious metal's appeal as a store of value.
Bullion tumbled 7.1 percent this week before today, while the dollar rose 1.9 percent against the euro. Gold usually moves in the opposite direction to the U.S. currency as investors tend to buy bullion as an alternative asset when the dollar falls.
``We should see some further downside risk in gold because the U.S. dollar could firm further, and the market is still mildly overbought so there's potential for more sell-off,'' Mark Pervan, analyst at Australia and New Zealand Banking Group Ltd., said today by phone from Melbourne.
Bullion for immediate delivery rose 0.7 percent to $751.55 an ounce at 1:07 p.m. in Singapore. It touched $736.70 an ounce yesterday, the lowest since Oct. 9, 2007. Silver for immediate delivery advanced 1.9 percent to $10.76 an ounce.
The U.S. currency was little changed at $1.3988 per euro from $1.3998 yesterday, after touching $1.3882, the strongest level since Sept. 18, 2007.
Gold's direction will also be affected by crude oil, Pervan said. ``Oil looks like it may be choppy in the near term in the active hurricane season and could slow gold's decline,'' Pervan said. Crude oil in New York advanced 0.4 percent to $101.26 a barrel at 1:08 p.m. in Singapore.
Long Positions
``We judge speculative net long positions greatly reduced in precious metals, although still long,'' said John Reade, analyst at UBS Ltd. in London, in a report yesterday. Yet the ``predominance of recently added short positions in precious and base metals does not necessarily mean the market will rally.''
Investment in the SPDR Gold Trust, the biggest exchange- traded fund backed by bullion, has fallen 4.3 percent this week to 614.4 tons. The fund reached a record 705.9 tons on July 11.
December-delivery gold added 1.3 percent at $755.20 an ounce in after-hours electronic trading on the Comex division of the New York Mercantile Exchange.
Gold for December delivery traded in Shanghai fell 0.2 percent to 169 yuan a gram ($769 an ounce) at the same time.
In Japan, gold for August delivery on the Tokyo Commodity Exchange gained 1.3 percent to 2,602 yen a gram ($754 an ounce).
To contact the reporter on this story: Feiwen Rong in Singapore at frong2@bloomberg.net
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Sept. 12 (Bloomberg) -- Gold headed for the second weekly decline on concern the dollar's climb to the highest in a year against the euro would erode the precious metal's appeal as a store of value.
Bullion tumbled 7.1 percent this week before today, while the dollar rose 1.9 percent against the euro. Gold usually moves in the opposite direction to the U.S. currency as investors tend to buy bullion as an alternative asset when the dollar falls.
``We should see some further downside risk in gold because the U.S. dollar could firm further, and the market is still mildly overbought so there's potential for more sell-off,'' Mark Pervan, analyst at Australia and New Zealand Banking Group Ltd., said today by phone from Melbourne.
Bullion for immediate delivery rose 0.7 percent to $751.55 an ounce at 1:07 p.m. in Singapore. It touched $736.70 an ounce yesterday, the lowest since Oct. 9, 2007. Silver for immediate delivery advanced 1.9 percent to $10.76 an ounce.
The U.S. currency was little changed at $1.3988 per euro from $1.3998 yesterday, after touching $1.3882, the strongest level since Sept. 18, 2007.
Gold's direction will also be affected by crude oil, Pervan said. ``Oil looks like it may be choppy in the near term in the active hurricane season and could slow gold's decline,'' Pervan said. Crude oil in New York advanced 0.4 percent to $101.26 a barrel at 1:08 p.m. in Singapore.
Long Positions
``We judge speculative net long positions greatly reduced in precious metals, although still long,'' said John Reade, analyst at UBS Ltd. in London, in a report yesterday. Yet the ``predominance of recently added short positions in precious and base metals does not necessarily mean the market will rally.''
Investment in the SPDR Gold Trust, the biggest exchange- traded fund backed by bullion, has fallen 4.3 percent this week to 614.4 tons. The fund reached a record 705.9 tons on July 11.
December-delivery gold added 1.3 percent at $755.20 an ounce in after-hours electronic trading on the Comex division of the New York Mercantile Exchange.
Gold for December delivery traded in Shanghai fell 0.2 percent to 169 yuan a gram ($769 an ounce) at the same time.
In Japan, gold for August delivery on the Tokyo Commodity Exchange gained 1.3 percent to 2,602 yen a gram ($754 an ounce).
To contact the reporter on this story: Feiwen Rong in Singapore at frong2@bloomberg.net
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Japanese Stocks Rise as Financial Concern Eases; Suzuki Drops
By Masaki Kondo
Sept. 12 (Bloomberg) -- Japanese stocks rose, led by banks, on speculation a purchase of Lehman Brothers Holdings Inc. will ease uncertainty in financial markets.
Resona Holdings Inc., the nation's fourth-biggest lender, leapt 12 percent, the most in a year. Kawasaki Kisen Kaisha Ltd. led gains by shipping lines as recent declines made their shares cheap relative to earnings. Suzuki Motor Corp., which gets more than a third of its profit from Asia outside Japan, dropped 4.7 percent after China's government said the nation's industrial production grew at the slowest pace in six years.
``Considering Lehman's failure would lead to social instability, a possible purchase of the U.S. brokerage has eased the sense of crisis among investors,'' said Yoshihiro Ito, a Tokyo-based senior strategist at Okasan Asset Management Co., which oversees about $9.3 billion.
The Nikkei 225 Stock Average climbed 112.26, or 0.9 percent, to close at 12,214.76 in Tokyo. The broader Topix index rose 14.48, or 1.3 percent, to 1,177.20, with almost three stocks gaining for each that slumped on the gauge. The Nikkei ended the week little changed, while the Topix rose 0.5 percent.
Lehman, the fourth-biggest U.S. brokerage that has lost more than 70 percent of its value this month, entered into talks with potential buyers, people with knowledge of the situation said. Bank of America Corp. is among potential acquirers, the Wall Street Journal reported on its Web site.
The Nikkei and Topix briefly lost ground in the afternoon session after China's statistics bureau said the nation's industrial production rose 12.8 percent last month from a year earlier, the slowest pace since 2002. Economists had estimated a 14.5 percent advance.
Japan's Cabinet Office said today gross domestic product contracted an annualized 3 percent last quarter, wider than the 2.4 percent drop reported last month. Consumer spending, which accounted for about 60 percent of the nation's GDP, fell 0.5 percent, as prices rose faster than wages.
Nikkei futures expiring in December added 0.7 percent to 12,150 in Osaka and rose 0.6 percent to 12,155 in Singapore.
To contact the reporter for this story: Masaki Kondo in Tokyo at mkondo3@bloomberg.net.
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Sept. 12 (Bloomberg) -- Japanese stocks rose, led by banks, on speculation a purchase of Lehman Brothers Holdings Inc. will ease uncertainty in financial markets.
Resona Holdings Inc., the nation's fourth-biggest lender, leapt 12 percent, the most in a year. Kawasaki Kisen Kaisha Ltd. led gains by shipping lines as recent declines made their shares cheap relative to earnings. Suzuki Motor Corp., which gets more than a third of its profit from Asia outside Japan, dropped 4.7 percent after China's government said the nation's industrial production grew at the slowest pace in six years.
``Considering Lehman's failure would lead to social instability, a possible purchase of the U.S. brokerage has eased the sense of crisis among investors,'' said Yoshihiro Ito, a Tokyo-based senior strategist at Okasan Asset Management Co., which oversees about $9.3 billion.
The Nikkei 225 Stock Average climbed 112.26, or 0.9 percent, to close at 12,214.76 in Tokyo. The broader Topix index rose 14.48, or 1.3 percent, to 1,177.20, with almost three stocks gaining for each that slumped on the gauge. The Nikkei ended the week little changed, while the Topix rose 0.5 percent.
Lehman, the fourth-biggest U.S. brokerage that has lost more than 70 percent of its value this month, entered into talks with potential buyers, people with knowledge of the situation said. Bank of America Corp. is among potential acquirers, the Wall Street Journal reported on its Web site.
The Nikkei and Topix briefly lost ground in the afternoon session after China's statistics bureau said the nation's industrial production rose 12.8 percent last month from a year earlier, the slowest pace since 2002. Economists had estimated a 14.5 percent advance.
Japan's Cabinet Office said today gross domestic product contracted an annualized 3 percent last quarter, wider than the 2.4 percent drop reported last month. Consumer spending, which accounted for about 60 percent of the nation's GDP, fell 0.5 percent, as prices rose faster than wages.
Nikkei futures expiring in December added 0.7 percent to 12,150 in Osaka and rose 0.6 percent to 12,155 in Singapore.
To contact the reporter for this story: Masaki Kondo in Tokyo at mkondo3@bloomberg.net.
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Asian Stocks Snap 3-Day Losing Streak; Commodities Shares Gain
By Kyung Bok Cho
Sept. 12 (Bloomberg) -- Asian stocks climbed for the first time in four days, led by commodity-related and financial companies, as metals prices rose and speculation Lehman Brothers Holdings Inc. will find a buyer eased concern of bank failures.
BHP Billiton Ltd. added 4.4 percent after copper and zinc advanced. Mitsubishi UFJ Financial Group Inc. gained 4.3 percent as Lehman entered talks with buyers including Bank of America Corp., according to the Wall Street Journal.
The MSCI Asia Pacific Index added 0.9 percent to 115.93 as of 3:42 p.m. in Tokyo, poised to end a three-day, 5.3 percent drop. The measure is set to lose 0.8 percent this week after Lehman's record quarterly loss pushed global writedowns and credit losses from the collapse in the U.S. mortgage market to $511 billion. The benchmark had surged earlier this week after the U.S. government's seizure of Fannie Mae and Freddie Mac.
``With Fannie and Freddie behind us, the lingering problem was Lehman, but the talk it may be bought by Bank of America suggests that we're headed for a solution,'' said Chu Moon Sung, who oversees $10 billion as head of overseas investment at Shinhan BNP Paribas Investment Trust Management Co. in Seoul. ``Today is a bit of a technical rebound, helped by the feeling that the worst may be past.''
Japan's Nikkei 225 Stock Average gained 0.9 percent to 12,214.76. Mitsui & Co., which generates more than half its profit from commodities trading, rallied 5.5 percent after volatility on a benchmark gauge of raw-material prices rose to the highest since 1973, a signal that declines may be over.
Commodities Rally
Most benchmark indexes advanced. Vietnam's VN Index plunged 4.2 percent, the region's largest retreat. Indonesia's Jakarta Composite index lost 4 percent led by PT Astra International, the nation's biggest auto retailer, after the rupiah fell as much as 1 percent against the dollar and triggered concern inflation will quicken and prompt the central bank to raise interest rates.
U.S. stocks rose yesterday, with the Standard & Poor's 500 Index advancing 1.4 percent to 1,249.05 as bank shares staged a comeback on news of Lehman's potential sale. S&P 500 futures were 0.2 percent lower.
BHP, the world's biggest mining company, added 4.4 percent to A$36 in Sydney. Mitsui advanced 5.5 percent to 1,617 yen in Tokyo. A measure of six metals traded on the London Metal Exchange yesterday advanced 1.1 percent, with zinc climbing 2.5 percent and copper 1.3 percent.
The weekly historical volatility for the Reuters/Jefferies CRB Index of 19 raw materials rose to 27 percent yesterday, on a 10-week basis. The only other time the volatility measure has risen above 25 percent was in August 1973. After peaking at 32 on Sept. 7, 1973, it began a four-week decline of 12 percent and headed for a three-month low in November of that year.
Lehman Buyer?
Mitsubishi UFJ, Japan's biggest bank, rallied 4.3 percent to 858 yen. Woori Finance Holdings Co., which has the most U.S. mortgage-related investments among South Korean banks, gained 5.9 percent to 15,150 won.
The U.S. Treasury and the Federal Reserve have been working with Lehman on a sale of the securities firm, and a deal may be announced before Asian markets open Sept. 15, a person with knowledge of the matter said. Bank of America is a potential suitor, the Wall Street Journal said on its Web site.
Sumitomo Mitsui Financial Group Inc., Japan's second-largest bank by market value, advanced 5.5 percent to 686,000 yen. Macquarie Group Ltd., Australia's biggest securities firm, rose 4.8 percent to A$44.01.
``Some people out there believe that the worst is over,'' said Nicole Sze, a Singapore-based investment analyst at Bank Julius Baer & Co., which manages $350 billion in assets worldwide. ``If the rescue doesn't go through, obviously it will have a serious impact on the market.''
Hanjin, Anhui Conch
Hanjin Shipping Co., the largest South Korean shipping line, advanced 7.4 percent to 27,500 won. Qantas Airways Ltd., Australia's biggest airline, gained 3.5 percent to A$3.54. Crude oil fell 1.7 percent to $100.87 a barrel yesterday in New York, the lowest since March 24. Oil has dropped by a third from a record on July 11 as high prices and slowing global economic growth cut demand.
Cement makers that do business in China declined on concern property demand will slump, hurting profits. Anhui Conch Cement Co., China's biggest maker of the construction material, fell 1.4 percent to HK$29.10 in Hong Kong, the fourth day of losses. Taiwan Cement Corp., the second-largest on the island, slid 2.4 percent to NT$24.05, the lowest since September 2006.
``A China property sector meltdown could be looming,'' Morgan Stanley analysts including Jerry Lou said in a report dated today. ``Property prices are already cracking in China in major cities.''
Huaneng, Noritz
Chinese power producers rose after the China Securities Journal said the government will raise retail electricity prices this year. Shanghai Electric Power Co., which supplies a third of the power in China's richest city, added 6.2 percent to 3.77 yuan in Shanghai. Huaneng Power International Inc., a unit of the nation's biggest electricity producer by capacity, gained 3.5 percent to HK$5.90 in Hong Kong.
Noritz Corp., a Japanese maker of gas-fired baths and water heaters, surged 10 percent to 1,072 yen, the biggest gain since March 4, 2002. Warren Lichtenstein's Steel Partners fund, which has an 18.7 percent stake in Noritz, proposed yesterday to buy all the shares in the company it doesn't already own.
To contact the reporters for this story: Patrick Rial in Tokyo at prial@bloomberg.net; Kyung Bok Cho in Seoul at kcho7@bloomberg.net
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France Stocks Update: CAC 40 Rises 53.54 to 4,302.61
By Daniel Hauck
Sep. 12 (Bloomberg) -- France's benchmark stock index, the CAC 40, rose 1.26 percent at 9:05 a.m.
The index of 39 companies traded on the Paris Bourse rose 53.54 to 4,302.61. Among the stocks in the index, 39 rose and none fell.
Gains in the CAC 40 were led by Arcelormittal, Total Sa and Societe Generale. About 2.89 million shares traded in the CAC 40.
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Sep. 12 (Bloomberg) -- France's benchmark stock index, the CAC 40, rose 1.26 percent at 9:05 a.m.
The index of 39 companies traded on the Paris Bourse rose 53.54 to 4,302.61. Among the stocks in the index, 39 rose and none fell.
Gains in the CAC 40 were led by Arcelormittal, Total Sa and Societe Generale. About 2.89 million shares traded in the CAC 40.
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Germany Stocks Update: DAX Index Rises 41.24 to 6,220.14
By Daniel Hauck
Sep. 12 (Bloomberg) -- Germany's benchmark stock index, the DAX Index, rose 0.67 percent at 9:05 a.m.
The index of 30 companies traded on the Frankfurt Stock Exchange rose 41.24 to 6,220.14. Among the stocks in the index, 25 rose and 5 fell.
Gains in the DAX were led by Sap Ag, Siemens Ag and E.on Ag. About 3.91 million shares traded in the DAX.
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Sep. 12 (Bloomberg) -- Germany's benchmark stock index, the DAX Index, rose 0.67 percent at 9:05 a.m.
The index of 30 companies traded on the Frankfurt Stock Exchange rose 41.24 to 6,220.14. Among the stocks in the index, 25 rose and 5 fell.
Gains in the DAX were led by Sap Ag, Siemens Ag and E.on Ag. About 3.91 million shares traded in the DAX.
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Stocks in Europe, Asia Rise on Possible Lehman Sale; UBS Gains
By Sarah Jones
Sept. 12 (Bloomberg) -- Stocks in Europe and Asia rose for the first time in four days as speculation Lehman Brothers Holdings Inc. will find a buyer eased concern of bank failures. U.S. index futures declined.
Societe Generale SA and UBS AG both climbed 2.1 percent and Mitsubishi UFJ Financial Group Inc. gained 4.3 percent in Tokyo. BHP Billiton Ltd., the world's largest mining company, rallied 3.1 percent as copper rose for a third day in London. Deutsche Postbank AG climbed 3.8 percent after Banco Santander SA offered to buy the German bank.
The MSCI World Index added 0.8 percent to 1,272.68 at 8:05 a.m. in London, lifting the index to a 0.3 percent gain for the week. All 10 industry groups increased.
``Much of the talk is still about Lehman Brothers and the fact that the company is now expected to announce it has found a buyer,'' said Matt Buckland, a London-based dealer at CMC.
Europe's Dow Jones Stoxx 600 Index advanced 0.8 percent, while the MSCI Asia Pacific Index increased 0.8 percent. Futures on the Standard & Poor's 500 Index fell 0.1 percent before a report that may show retail sales excluding autos declined.
The U.S. Treasury and the Federal Reserve have been working with Lehman on a sale of the securities firm, and a deal may be announced before Asian markets open Sept. 15, a person with knowledge of the matter said.
Bank of America Corp. is a potential suitor, the Wall Street Journal said on its Web site.
More than $15 trillion has been erased from global equities in 2008 as the biggest surge in mortgage defaults in at least three decades sparked $510 billion in credit-related losses worldwide and threatened economic growth.
SocGen, UBS
Societe Generale, France's second-largest bank, rose 2.1 percent to 65.23 euros. UBS, the European bank hardest hit by the subprime crisis, gained 2.1 percent to 23.38 francs. Credit Suisse Group AG, Switzerland's second-biggest bank, added 2 percent to 52 francs.
Mitsubishi UFJ, Japan's largest bank, rallied 4.3 percent to 858 yen. Woori Finance Holdings Co., which has the most U.S. mortgage-related investments among South Korean banks, gained 5.2 percent to 15,050 won.
BHP Billiton jumped 3.1 percent to 1,448 pence as copper heads for the first weekly gain in three. Rio Tinto Group, the world's third-biggest mining company, added 3.2 percent to 4,289 pence.
The base metal for three-month delivery rose as much as 1.3 percent to $7,020 a ton on the London Metal Exchange.
Postbank climbed 3.8 percent to 47.50 euros. Santander said yesterday it was seeking to buy the whole bank, without elaborating. The bid comes after Deutsche Bank AG, Germany's biggest bank, said it was in talks to buy as much as 30 percent of Deutsche Postbank.
To contact the reporter on this story: Sarah Jones in London at sjones35@bloomberg.net.
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Sept. 12 (Bloomberg) -- Stocks in Europe and Asia rose for the first time in four days as speculation Lehman Brothers Holdings Inc. will find a buyer eased concern of bank failures. U.S. index futures declined.
Societe Generale SA and UBS AG both climbed 2.1 percent and Mitsubishi UFJ Financial Group Inc. gained 4.3 percent in Tokyo. BHP Billiton Ltd., the world's largest mining company, rallied 3.1 percent as copper rose for a third day in London. Deutsche Postbank AG climbed 3.8 percent after Banco Santander SA offered to buy the German bank.
The MSCI World Index added 0.8 percent to 1,272.68 at 8:05 a.m. in London, lifting the index to a 0.3 percent gain for the week. All 10 industry groups increased.
``Much of the talk is still about Lehman Brothers and the fact that the company is now expected to announce it has found a buyer,'' said Matt Buckland, a London-based dealer at CMC.
Europe's Dow Jones Stoxx 600 Index advanced 0.8 percent, while the MSCI Asia Pacific Index increased 0.8 percent. Futures on the Standard & Poor's 500 Index fell 0.1 percent before a report that may show retail sales excluding autos declined.
The U.S. Treasury and the Federal Reserve have been working with Lehman on a sale of the securities firm, and a deal may be announced before Asian markets open Sept. 15, a person with knowledge of the matter said.
Bank of America Corp. is a potential suitor, the Wall Street Journal said on its Web site.
More than $15 trillion has been erased from global equities in 2008 as the biggest surge in mortgage defaults in at least three decades sparked $510 billion in credit-related losses worldwide and threatened economic growth.
SocGen, UBS
Societe Generale, France's second-largest bank, rose 2.1 percent to 65.23 euros. UBS, the European bank hardest hit by the subprime crisis, gained 2.1 percent to 23.38 francs. Credit Suisse Group AG, Switzerland's second-biggest bank, added 2 percent to 52 francs.
Mitsubishi UFJ, Japan's largest bank, rallied 4.3 percent to 858 yen. Woori Finance Holdings Co., which has the most U.S. mortgage-related investments among South Korean banks, gained 5.2 percent to 15,050 won.
BHP Billiton jumped 3.1 percent to 1,448 pence as copper heads for the first weekly gain in three. Rio Tinto Group, the world's third-biggest mining company, added 3.2 percent to 4,289 pence.
The base metal for three-month delivery rose as much as 1.3 percent to $7,020 a ton on the London Metal Exchange.
Postbank climbed 3.8 percent to 47.50 euros. Santander said yesterday it was seeking to buy the whole bank, without elaborating. The bid comes after Deutsche Bank AG, Germany's biggest bank, said it was in talks to buy as much as 30 percent of Deutsche Postbank.
To contact the reporter on this story: Sarah Jones in London at sjones35@bloomberg.net.
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Lehman's Fuld Races to Sell Firm as Fed Balks at Deal
By Yalman Onaran
Sept. 12 (Bloomberg) -- Lehman Brothers Holdings Inc. Chief Executive Officer Richard Fuld is seeking buyers for the investment bank amid signs that the U.S. government may balk at providing the funding that enabled Bear Stearns Cos. to sell itself and avoid bankruptcy.
Fuld, who built Lehman into the biggest U.S. underwriter of mortgage securities during his four decades at the firm, was cornered into a potential forced sale after talks about a cash infusion from Korea Development Bank ended, sparking a 70 percent drop in the firm's market value during the past three days. Unlike when JPMorgan Chase & Co. took over Bear Stearns, the Federal Reserve and Treasury aren't likely to put up money for a purchase of Lehman, people briefed on the matter said yesterday.
``Lehman's sale is likely to take a different form because there was serious political fallout from the JPMorgan-Bear deal,'' said Sean Egan, president of Egan-Jones Ratings Co. in Haverford, Pennsylvania. ``It could be a consortium that buys Lehman, with the Fed's help.''
Bankers from other firms were reviewing Lehman's books yesterday, according to people with knowledge of the situation, and a deal may be announced before Asian markets open Sept. 15, one of the people said. The New York-based investment bank announced the biggest loss in its 158-year history on Sept. 10, as devalued real estate assets led to $5.6 billion of writedowns in the third quarter.
Downgrade Looms
Without a ``strategic arrangement'' in the ``near term,'' Lehman's credit ratings may be downgraded, Moody's Investors Service said after Lehman reported the results. A downgrade could ratchet up Lehman's borrowing costs and deter others from trading with the firm.
Bank of America Corp., the biggest U.S. consumer bank, is among the possible buyers, the Wall Street Journal reported yesterday, citing unidentified people. Spokesmen for the Charlotte, North Carolina-based lender, Lehman and the Fed declined to comment. Treasury is ``in regular contact'' with market participants, spokeswoman Jennifer Zuccarelli said.
Lehman shares rose to $4.72 as of 9:25 a.m. in Frankfurt, 12 percent up from their $4.22 close in New York yesterday.
When Bear Stearns collapsed in March after customers and lenders deserted the firm on concern it was running out of cash, the Fed agreed to take on $29 billion of hard-to-sell assets from the company to induce JPMorgan Chase & Co. to buy it. At the same time, the central bank opened a lending facility for brokerages, including Lehman.
Moral Hazard
The decisions prompted warnings from current and former regulators, who said that the Fed was creating a so-called moral hazard by encouraging firms to take on excessive risk in anticipation of government aid in the event their bets fail.
Richmond Fed President Jeffrey Lacker and his Philadelphia counterpart Charles Plosser raised concerns about moral hazard in June, urging that lines be set for any central bank intervention. U.S. regulators reluctant to backstop another investment bank may point to the fact that speculation about Lehman's potential failure hasn't generated as much concern among investors as Bear Stearns's implosion.
Unlike the days leading up to the forced sale of Bear Stearns, volatility in the money markets remains relatively muted. The difference between what the U.S. government and banks pay to borrow in dollars for three months, the so-called TED spread, rose 11 points the past two weeks to 121 basis points, compared with an increase of 38 basis points to 160 basis points in the period leading up to Bear Stearns's collapse.
``What would be best is to alter the precedent with Bear Stearns,'' said former Fed governor Laurence Meyer, who is now vice chairman of Macroeconomic Advisers LLC, an economic forecasting firm in Washington.
Lehman's Mortgage Portfolio
Meyer said a preferable model would be the Fed's 1998 coordination of a rescue for hedge fund Long-Term Capital Management LP. In that case, officials convened bankers to forge a resolution without contributing Fed funds.
Potential buyers demanded some sort of government protection in the Bear Stearns case because of the mortgage- related assets the firm owned, which had plummeted in value. Since the collapse of the subprime mortgage market last year, banks have reported more than $510 billion of writedowns and credit losses on such assets.
Lehman still had a $50 billion mortgage portfolio at the end of August, and any would-be buyer would likely seek Fed backing, according to David Hendler, an analyst at CreditSights Inc.
Korea Development Talks
``It'll have to be a joint public-private solution because the buyers aren't going to take these hits on the troubled assets,'' Hendler said.
Lehman had advanced discussions about a deal with state- owned Korea Development Bank, which offered as much as $6 billion for a 25 percent stake in the firm, or about $26 a share, people briefed on the talks said last week. Lehman fell to $4.22 in New York Stock Exchange composite trading yesterday.
Goldman Sachs Group Inc., the biggest U.S. securities firm, has no plan to buy Lehman without financial backing from the Fed or Treasury, a person briefed on the matter said yesterday. Goldman spokesman Michael DuVally said the investment bank ``continues to do business'' with Lehman.
Several of the largest European banks may be tempted to buy Lehman to bolster their presence in the U.S., analyst Richard Bove said earlier this week. Ladenburg Thalmann & Co.'s Bove speculated that HSBC Holdings Plc, Europe's biggest bank by market value, could be a suitor.
HSBC, Deutsche Bank
London-based HSBC said on Sept. 10 it was ``highly unlikely'' to buy an investment bank while Josef Ackermann, the CEO of Deutsche Bank AG said he wasn't interested in ``parts or all of Lehman.''
Fuld, 62, is the longest-serving CEO on Wall Street, having been in charge of Lehman since 1993. James ``Jimmy'' Cayne, who resigned as Bear Stearns's CEO two months before the firm collapsed, was at the helm for 15 years.
``I have always said that if anybody came with an attractive proposition that made it compelling for shareholder value, that would be brought to the board, discussed with the board and evaluated, and that has not changed,'' Fuld said on a conference call with analysts on Sept. 10.
To contact the reporter on this story: Yalman Onaran in New York at yonaran@bloomberg.net
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Com Dev International, Potash Corp, Q9: Canada Equity Preview
By John Kipphoff
Sept. 12 (Bloomberg) -- The following companies may have unusual price changes in Canadian trading tomorrow. Stock symbols are in parentheses, and share prices are from the last close in Toronto.
The Standard & Poor's/TSX Composite Index rose 0.9 percent to 12,612.76.
Com Dev International Ltd. (CDV CN): The maker of satellite subsystems reported third-quarter sales and per-share profit that exceeded the average of estimates in a Bloomberg survey. Com Dev also said revenue in the current year will grow by more than 20 percent, faster than the 15 percent to 20 percent range it had previously estimated. The shares rose 1 percent to C$3.08.
Potash Corp. of Saskatchewan Inc. (POT CN): The world's largest maker of crop nutrients by market value said its stock is undervalued and that it plans to double its buyback program by purchasing as many as 15.68 million additional shares, or about 5 percent of its outstanding common equity.
The company already bought 15.82 million shares this year, according to a statement on Canada NewsWire. ``Our shares are significantly undervalued versus our long-term potential,'' Bill Doyle, Potash's chief executive officer, said in the release. Doyle owned 328,5000 Potash shares as of Sept. 4, according to Bloomberg data. The shares rose 5.8 percent to C$162.
Q9 Networks Inc. (Q CN): The operator of Internet data centers reported an unexpected third-quarter loss of 1 cent a share before one-time items. Analysts in a Bloomberg poll had estimated profit of 3 cents a share. Q9 agreed last month to be bought by U.S. buyout firm Abry Partners LLC for C$361 million ($344 million). The shares gained 0.2 percent to C$16.78.
To contact the reporter on this story: John Kipphoff in Toronto at jkipphoff@bloomberg.net.
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Sept. 12 (Bloomberg) -- The following companies may have unusual price changes in Canadian trading tomorrow. Stock symbols are in parentheses, and share prices are from the last close in Toronto.
The Standard & Poor's/TSX Composite Index rose 0.9 percent to 12,612.76.
Com Dev International Ltd. (CDV CN): The maker of satellite subsystems reported third-quarter sales and per-share profit that exceeded the average of estimates in a Bloomberg survey. Com Dev also said revenue in the current year will grow by more than 20 percent, faster than the 15 percent to 20 percent range it had previously estimated. The shares rose 1 percent to C$3.08.
Potash Corp. of Saskatchewan Inc. (POT CN): The world's largest maker of crop nutrients by market value said its stock is undervalued and that it plans to double its buyback program by purchasing as many as 15.68 million additional shares, or about 5 percent of its outstanding common equity.
The company already bought 15.82 million shares this year, according to a statement on Canada NewsWire. ``Our shares are significantly undervalued versus our long-term potential,'' Bill Doyle, Potash's chief executive officer, said in the release. Doyle owned 328,5000 Potash shares as of Sept. 4, according to Bloomberg data. The shares rose 5.8 percent to C$162.
Q9 Networks Inc. (Q CN): The operator of Internet data centers reported an unexpected third-quarter loss of 1 cent a share before one-time items. Analysts in a Bloomberg poll had estimated profit of 3 cents a share. Q9 agreed last month to be bought by U.S. buyout firm Abry Partners LLC for C$361 million ($344 million). The shares gained 0.2 percent to C$16.78.
To contact the reporter on this story: John Kipphoff in Toronto at jkipphoff@bloomberg.net.
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Alsea, Arequipa, M. Dias, Paranapanema: Latin Equity Preview
By William Freebairn and Paulo Winterstein
Sept. 12 (Bloomberg) -- The following companies may have unusual price changes today in Latin America trading. Stock symbols are in parentheses, and share prices are from the previous close. Preferred shares are usually the most-traded class of stock in Brazil.
The MSCI Latin America Index rose 1.3 percent yesterday to 3,420.56.
Brazil
M. Dias Branco SA Industria & Comercio de Alimentos (MDIA3 BS): Brazil's biggest maker of pasta and cookies plans to buy back up to 7.3 percent of its shares on the market over the next year. The board approved the repurchase of up to about 2.66 million voting shares, Fortaleza, Brazil-based M. Dias said in a filing posted yesterday on Brazil's securities regulator Web site. M. Dias fell 1 percent to 19 reais.
Paranapanema SA (PMAM3 BS): The Brazilian copper and tin producer that was in talks to sell units to Cia. Vale do Rio Doce converted bonds into 341 million reais ($189 million) worth of voting shares. The company's board approved the conversion of bonds into about 75 million new shares, raising the company's capital stock by 23 percent to 1.82 billion reais, Paranapanema said yesterday in a filing posted on Brazil's securities regulator Web site. Paranapanema fell 7 percent to 4.71 reais.
Chile
Compania de Telecomunicaciones de Chile SA (CTCA CC): Telefonica SA, Europe's second-largest telephone operator, will spend up to $985 million to buy shares it doesn't already own in Telefonica Chile, as the country's biggest fixed-line carrier is known. Telefonica will offer 1,000 pesos a share for Telefonica Chile's series A shares, it wrote in an e-mailed statement after the close of Chilean trading yesterday. That's 25 percent higher than Telefonica Chile's closing price of 801 pesos.
Mexico
Alsea SAB (ALSEA* MM): The operator of Domino's Pizza and Starbucks Coffee shops in Mexico said it hired the local unit of UBS AG to make a market in its shares. UBS has agreed to offer to buy and sell shares of Alsea as part of a plan to boost trading in the stock, the restaurant operator said in a statement e- mailed yesterday. Alsea fell 1.9 percent to 10.34 pesos.
Peru
Corp. Aceros Arequipa (CORA PE): The Peruvian steelmaker has no formal offers from any Brazilian company to acquire a stake and has not received a direct proposal for an alliance from Chile's Cap SA, Arequipa reported in a filing yesterday it said was a response to an inquiry by regulators. Arequipa rose 1.7 percent to 4.17 soles.
To contact the reporter on this story: William Freebairn in Mexico City at wfreebairn@bloomberg.net; Paulo Winterstein in Sao Paulo at pwinterstein@bloomberg.net.
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Sept. 12 (Bloomberg) -- The following companies may have unusual price changes today in Latin America trading. Stock symbols are in parentheses, and share prices are from the previous close. Preferred shares are usually the most-traded class of stock in Brazil.
The MSCI Latin America Index rose 1.3 percent yesterday to 3,420.56.
Brazil
M. Dias Branco SA Industria & Comercio de Alimentos (MDIA3 BS): Brazil's biggest maker of pasta and cookies plans to buy back up to 7.3 percent of its shares on the market over the next year. The board approved the repurchase of up to about 2.66 million voting shares, Fortaleza, Brazil-based M. Dias said in a filing posted yesterday on Brazil's securities regulator Web site. M. Dias fell 1 percent to 19 reais.
Paranapanema SA (PMAM3 BS): The Brazilian copper and tin producer that was in talks to sell units to Cia. Vale do Rio Doce converted bonds into 341 million reais ($189 million) worth of voting shares. The company's board approved the conversion of bonds into about 75 million new shares, raising the company's capital stock by 23 percent to 1.82 billion reais, Paranapanema said yesterday in a filing posted on Brazil's securities regulator Web site. Paranapanema fell 7 percent to 4.71 reais.
Chile
Compania de Telecomunicaciones de Chile SA (CTCA CC): Telefonica SA, Europe's second-largest telephone operator, will spend up to $985 million to buy shares it doesn't already own in Telefonica Chile, as the country's biggest fixed-line carrier is known. Telefonica will offer 1,000 pesos a share for Telefonica Chile's series A shares, it wrote in an e-mailed statement after the close of Chilean trading yesterday. That's 25 percent higher than Telefonica Chile's closing price of 801 pesos.
Mexico
Alsea SAB (ALSEA* MM): The operator of Domino's Pizza and Starbucks Coffee shops in Mexico said it hired the local unit of UBS AG to make a market in its shares. UBS has agreed to offer to buy and sell shares of Alsea as part of a plan to boost trading in the stock, the restaurant operator said in a statement e- mailed yesterday. Alsea fell 1.9 percent to 10.34 pesos.
Peru
Corp. Aceros Arequipa (CORA PE): The Peruvian steelmaker has no formal offers from any Brazilian company to acquire a stake and has not received a direct proposal for an alliance from Chile's Cap SA, Arequipa reported in a filing yesterday it said was a response to an inquiry by regulators. Arequipa rose 1.7 percent to 4.17 soles.
To contact the reporter on this story: William Freebairn in Mexico City at wfreebairn@bloomberg.net; Paulo Winterstein in Sao Paulo at pwinterstein@bloomberg.net.
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USD Lost Ground
Daily Forex Fundamentals | Written by Crown Forex | Sep 12 08 07:38 GMT |
The greenback lost momentum in the markets as oil prices gained reducing the appeal of the greenback in the markets. Investors hedged in the crude markets against inflation and a weak dollar. Today is a big day for the U.S. economy as they will be releasing data concerning retail sales and PPI which will either keep the dollar falling or help the currency pick up on its losses.
The euro is gaining versus the greenback based on correctional movements as the pair could not break the support of 1.3900 before reversing its wave and trying to climb to the resistance of 1.4055. The EUR/USD is currently trading at 1.4046 while recording a high of 1.4055 and a low of 1.3972 as on a daily basis the pair is still oversold in the markets.
As for the pound also like the euro is rising past the USD due to correctional movements in the market as the pair could not breach the support of 1.7465 before rebounding to try and reach the resistance of 1.7705 yet struggling as the UK economy lacks major fundamental data that would help the currency further extend gains. We already know that the UK economy is at a peak of a recession which is the main idea behind a deteriorating pound. The GBP/USD is traded at 1.7642 while recording a high of 1.7658 and a low of 1.75550.
Currently in the markets we are seeing carry trades as investors buy higher yielding assets and sell low yielding assets like the yen, due to this, the yen is weak in the markets. The USD/JPY is traded at 107.48 between the support of 107.15 and the resistance of 107.85. The pair recorded a high of 107.62 and a low of 107.01.
Crown Forex
disclaimer:The above may contain information for investors/traders and is not a recommendation to buy or sell currencies, gold, silver & energies, nor an offer to buy or sell currencies, gold, silver & energies. The information provided is obtained from sources deemed reliable but is not guaranteed as to accuracy or completeness. I am not liable for any losses or damages, monetary or otherwise that result. I recommend that anyone trading currencies, gold, silver & energies should do so with caution and consult with a broker before doing so. Prior performance may not be indicative of future performance. Currencies, gold, silver &energies presented should be considered speculative with a high degree of volatility and risk.
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The greenback lost momentum in the markets as oil prices gained reducing the appeal of the greenback in the markets. Investors hedged in the crude markets against inflation and a weak dollar. Today is a big day for the U.S. economy as they will be releasing data concerning retail sales and PPI which will either keep the dollar falling or help the currency pick up on its losses.
The euro is gaining versus the greenback based on correctional movements as the pair could not break the support of 1.3900 before reversing its wave and trying to climb to the resistance of 1.4055. The EUR/USD is currently trading at 1.4046 while recording a high of 1.4055 and a low of 1.3972 as on a daily basis the pair is still oversold in the markets.
As for the pound also like the euro is rising past the USD due to correctional movements in the market as the pair could not breach the support of 1.7465 before rebounding to try and reach the resistance of 1.7705 yet struggling as the UK economy lacks major fundamental data that would help the currency further extend gains. We already know that the UK economy is at a peak of a recession which is the main idea behind a deteriorating pound. The GBP/USD is traded at 1.7642 while recording a high of 1.7658 and a low of 1.75550.
Currently in the markets we are seeing carry trades as investors buy higher yielding assets and sell low yielding assets like the yen, due to this, the yen is weak in the markets. The USD/JPY is traded at 107.48 between the support of 107.15 and the resistance of 107.85. The pair recorded a high of 107.62 and a low of 107.01.
Crown Forex
disclaimer:The above may contain information for investors/traders and is not a recommendation to buy or sell currencies, gold, silver & energies, nor an offer to buy or sell currencies, gold, silver & energies. The information provided is obtained from sources deemed reliable but is not guaranteed as to accuracy or completeness. I am not liable for any losses or damages, monetary or otherwise that result. I recommend that anyone trading currencies, gold, silver & energies should do so with caution and consult with a broker before doing so. Prior performance may not be indicative of future performance. Currencies, gold, silver &energies presented should be considered speculative with a high degree of volatility and risk.
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Major Market Mover: European VS American
| Daily Forex Fundamentals | Written by Crown Forex | Sep 12 08 07:27 GMT | | |
| Reaching to the end of the week and Lehman brothers co. keep on looking for the suitable rescuer before they file for bankruptcy, negotiations with Korea Development Bank failed, and any prediction that the government intervention is not available at all, but some potential buyer are queuing up to rescue the leftover. Rumors diffused in the US session yesterday, that the Bank of America is among the potential buyers, yet the final decision is not out and prediction points out that later this weakened Lehman Brother will decide on who will be Hero taking all this burden. Even when markets remain to struggle with more fall down in their financial sectors, the US dollar continue to be the main winner in this entire dilemma; majors are not recovering vastly, as remain to struggle at their low levels. The Euro managed to rise up to 1.4005 levels in the early European Session recovering from the low recorded yesterday at 1.3882 levels; in addition to the Royal currency rising from yesterday's low at 1.7449 levels to trade today at 1.7600 levels. Fundamentals on the calendar are restricted on the Europeans and the Americans only today. The second quarter Employment data are to be released today; in addition to the monthly Industrial Production fell in July 0.2% from the previous flat reading, expectations proves that the yearly production fell 1.0% in July from the precious fall of 0.5%, clearing out that the surge in oil prices curbed the levels of production in addition in the appreciating Euro that made the European goods less appealing among competitors. Moving to the Americans; Producer Prices might have eased in August as pressures eased due to the falling oil prices, expectations points out that producer prices will ease in August falling 0.5% from the previous rise of 1.2%; on the year prices will rise to 10.2% from the previous rise of 9.8%. The Core monthly prices eased to a rise of 0.2% from the previous 0.7%, while the yearly prices surged to 3.7% from the previous 3.5%. Jobs layoffs and lower consumer spending due to the decreasing household incomes would have weighed upon the retail sales in States, the sales less Autos might fall 0.2% from the previous rise of 0.4% for the first time is six months, where the Americans don't have extra cash to spend on expensive products, but the normal retail sales in August will rise 0.2% coming better than the previous fall of 0.1%, a prices eased opening the door for the Americans to have an extra cash just to revive the output slightly, yet we have to keep in mind that the fall downs taking place in the States can't just to be compensated by the fall in oil prices Finally we would wrap up the week with the University of Michigan Confidence Survey, expectations points out that confidence is being restored back in the US economy rising to 63.9 levels in September from the previous 63.0 levels, the rising levels gives out some peace in investors' minds as they might see an improvement in the US economy in the upcoming period. My dear reader outlooks are not changing, the American economy is on the right track of improving and the European will remain to face the downside risks to growth… disclaimer:The above may contain information for investors/traders and is not a recommendation to buy or sell currencies, gold, silver & energies, nor an offer to buy or sell currencies, gold, silver & energies. The information provided is obtained from sources deemed reliable but is not guaranteed as to accuracy or completeness. I am not liable for any losses or damages, monetary or otherwise that result. I recommend that anyone trading currencies, gold, silver & energies should do so with caution and consult with a broker before doing so. Prior performance may not be indicative of future performance. Currencies, gold, silver &energies presented should be considered speculative with a high degree of volatility and risk.  | |
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Daily Financial Market Outlook
| Daily Forex Fundamentals | Written by Lloyds TSB | Sep 12 08 07:17 GMT | | |
| Overview & economic commentary After yesterday's strong rise in the US$, to below 1.40 versus the euro for the first time since September 2007, attention will be on US economic indicators today. Much of the rise in the US currency has been put on the apparent view that US economic conditions, though poor, are better than in many other parts of the world, including the eurozone. A test of that will be the retail sales figures for August, as the boost in recent months has come from tax rebates. As those fade, US economic growth may fall back quite sharply. We look for a modest rise in sales, which will dovetail with a rise in Michigan consumer confidence, also out today, see chart. But producer price figures are also out and will highlight that price inflation remains a major concern, even though oil prices have fallen by nearly $45 since the peak of $148 a few months ago. And the rise in inventories may be less, signalling that growth may not be hit by a further bout of de-stocking. For the rest of the world, the French data will suggest that consumer price inflation may have peaked in the euro area. For Japan, the final gdp figures for Q2 will confirm that the economy shrank. The data for Q2 gdp was revised down to -0.7% from -0.6%.A further fall cannot yet be ruled for Q3, and if it occurred would mark a technical recession in the world's second largest economy after the US. Currency commentary A lively session o/n in fx markets saw profit taking in the dollar and some reprieve for equities as US indices closed in positive territory despite the troubles in the banking sector. This helped €/$ to bounce back above 1.40 from yesterday's low of 1.3882. £/$ firmed to above 1.76, and this means that €/£ remains offered below 0.7975. US PPI and retail sales could be market movers for the dollar this afternoon as participants track consumer spending trends for the middle part of Q3 and what this may imply for the Fed meeting next week and growing speculation of a Fed rate cut by year end. However, equities could have the final word if participants heed the warning signals at WaMu and Lehmans, two institutions where deteriorating credit ratings will keep the rumour mill going of possible takeovers and intervention by the Fed/Treasury. The yen is a touch weaker this morning following the downward revision of Q2 GDP to -0.7%. £/yen is bid above 189.50. Major data and events today
Chart: US retail sales ex-cars have held up this year despite a rise in consumer pessimism. Is this about to change as tax rebate comes to an end? Lloyds TSB Bank Disclaimer: Any documentation, reports, correspondence or other material or information in whatever form be it electronic, textual or otherwise is based on sources believed to be reliable, however neither the Bank nor its directors, officers or employees warrant accuracy, completeness or otherwise, or accept responsibility for any error, omission or other inaccuracy, or for any consequences arising from any reliance upon such information. The facts and data contained are not, and should under no circumstances be treated as an offer or solicitation to offer, to buy or sell any product, nor are they intended to be a substitute for commercial judgement or professional or legal advice, and you should not act in reliance upon any of the facts and data contained, without first obtaining professional advice relevant to your circumstances. Expressions of opinion may be subject to change without notice. Although warrants and/or derivative instruments can be utilised for the management of investment risk, some of these products are unsuitable for many investors. The facts and data contained are therefore not intended for the use of private customers (as defined by the FSA Handbook) of Lloyds TSB Bank plc. Lloyds TSB Bank plc is authorised and regulated by the Financial Services Authority and is a signatory to the Banking Codes, and represents only the Scottish Widows and Lloyds TSB Marketing Group for life assurance, pension and investment business. | |
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Sunrise Market Commentary
Daily Forex Fundamentals | Written by KBC Bank | Sep 12 08 07:24 GMT |
* US Treasuries end volatile session slightly lower
Financial strains at first pushed Treasuries higher, but hopes on more government intervention put equities on a firmer footing later in the session, obliging Treasuries to head south. Eco data may be Treasury friendly today, but we suspect that the market is ripe for a correction, maybe on stronger equities.
* ECB still fears broad based second round effects
Yesterday, European bonds closed another volatile session almost unchanged. Although the technical picture is still bullish, the increased volatility over the past week suggests that the market remains vulnerable to some profit-taking. A fall below the uptrend line at 114.51 today would suggest that some downward correction is in the making.
* EUR/USD tests longstanding uptrend line. Decline to slow?
Global uncertainty made currency markets continue trading according to the established trading patterns. The yen was favoured; the dollar remains the second best while the euro fights an uphill battle. An easing of global market tensions (if it occurs) and some important technical support looming (especially in EUR/USD) might contain a trigger for EUR/USD sell-off to slow.
The Sunrise Headlines
* US Equities opened lower, but recovered on news that Lehman is in talks about a possible sale, driving also Asian stocks higher.
* Lehman Brothers says it is in serious talks about a possible sale after its share plunged more than 40% on Thursday; the Treasury and Fed were engaged in the talks.
* Washington Mutual is downgraded by Moody's to below investment-grade status as its access to debt and equity markets remains severely constrained. Washington Mutual responds that Moody's decision is inconsistent with their current financial condition.
* The Japanese economy shrank a bit more than originally reported in the second quarter raising fears that Japan is entering a recession as exports slow further.
* Oil continued its downtrend and has now approached the key $100 level, overnight fears about hurricane Ike drove oil slightly higher ($ 101.20).
* Today, the calendar contains exciting US data with the PPI, Retail Sales and Michigan consumer confidence.
Currencies: EUR/USD Tests Longstanding Uptrend Line
On Thursday, the same trading themes that were at work over the previous session continued to set tone for EUR/USD trading. Global economic and financially uncertainty, even if most of it comes from the US, still favours the yen (and to a lesser extent) also the US dollar. The euro fights an uphill battle. So, pressure on global stock markets also weighed on EUR/USD. EUR/JPY (temporary?) trading below the key 150/149 support area through the cross rates added to the negative pressure on EUR/USD. The intraday charts in EUR/USD also still have quite a high correlation with the oil price. So, EUR/USD set new lows around/just below the 1.39 mark around noon in Europe and early in US trading. In line with recent market behaviour, the US data (trade balance, PPI and claims) only had a temporary (negative) impact on the US dollar. Later in the session, the pressure on the stock markets eased (rumours that US authorities are engaged in negotiations with major banks to work out a solution for Lehman) and this also helped EUR/USD to move away from the lows. The pair closed the session at 1.3998 matching the close on Thursday.
Today, in Europe, the Industrial production data are on the calendar. In the US the PPI, retail sales and the Michigan consumer confidence are scheduled for release. Markets will in the first place be driven by global market factors (rumours on the measures that are expected over the weekend to stabilize the US financial system). (US) eco data recently at best only had an intraday impact on trading. This probably will remain the case today. Nevertheless, we will gradually grow more attentive on whether or not US eco data will show some improvement due the recent decline in oil prices.
Over the previous weeks, EUR/USD was caught in a forceful downtrend. The decline in the oil price and growing signs of deterioration in the European economy (and elsewhere outside the US) caused a sharp re-allocation in favour of the dollar. The dollar became favoured over the euro in case of global investor uncertainty, even if the source of that uncertainty comes from the US. The euro was often traded in line with other carry trade currencies, losing ground against the dollar and the yen in case of global market tension.
Longer term, we think that EUR/USD has turned the corner and if the fundamentals/ US eco data would gradually turn more positive (e.g due to the lower oil price), the dollar could gain further ground. Even if this week's market reaction was muted, the GSE measures over time might be a supporting factor for the US mortgage and housing market, too. As Europe and the rest of the world most probably lag the US, the eco environment could stay dollar constructive. However, the EUR/USD correction has already gone far and after such a strong move the chances for a period of consolidation or even some profit taking are growing. Easing global market tensions, e.g. in case of a Lehman solution this weekend may provide such a short-term trigger.
EUR/USD: tests longstanding uptrend line
Support comes in at 1.3925 (Reaction low hourly), at 1.3895/82 (Boll Bottom/ New reaction low + daily envelope), at 1.3852/40 (Previous July high/50 % retracement since 2005) and at 1.3773 (Starc bottom) and 1.3643 (2004 Dec low).
Resistance is seen at 1.4054 (STMA), at 1.4071/99 (Reaction high hourly/Breakdown hourly + daily envelope), at 1.4225 (ST high), and at 1.4345 (MTMA).
The pair is still in oversold conditions.
USD/JPY
From a technical point of view, the picture remains outright EUR/USD negative. The pair fell through a series of key support levels signaling a trend reversal and Yesterday EUR/USD even tested the high profile long-term uptrend line since 2002 (today at 1.3932).
For now the picture remains EUR/USD negative. However, yesterday EUR/USD painted a doji-like pattern on the daily charts and this could be a first warning signal that the downtrend is losing some momentum (in a day-to-day perspective). Further out the sharply downward oriented MTMA (today at 1.4345) and the previous low (1.4570) remain our first points of reference on the upside. A move above these levels would confirm a loss of momentum in the dollar rebound. To be honest, we would be surprised to see EUR/USD regain the 1.4570 area in a sustainable way. Nevertheless, in a day-to-day perspective some profit taking (or stop loss protection) on EUR/USD shorts is worth considering.
On Wednesday, ongoing global market tensions continued to support the yen. The pair started trading in Asia in the 107.87 area and gradually drifted lower during the European morning session and early in US trading to set an intraday low in the 106.05 area at the start of trading on the US stock markets. Easing pressures later in the session helped the pair to regain the 107-barrier later in the session. EUR/JPY showed a similar pattern; the pair set intraday-low in the 147.55 area but at the end of the day the pair was again close to the 150 mark.
This morning, Japanese data (final GDP and industrial production) had no impact on trading. Asian stocks post some cautious gains. However, the performance is again far from spectacular if compared to rebound late in US trading.
On the technical charts, USD/JPY staged a gradual rebound from the mid-July reaction low to set a new reaction high at 110.68 on August 15. Since then, the pair entered a consolidation pattern and gradually slipped through a series of support levels. Recently, USD/JPY trading is again closer related to what happens on the stock markets. This was yen supportive short-term. However, the yen tends to lose momentum as soon as the high profile negative headlines cool down. This could be the case if additional measures are taken to address the financial stress in the US. We still consider the pair as sideways oriented. A break above the MT reaction high (110.67) looks difficult to sustain. A drop below the 105.53 reaction low would make the picture more negative. For now, range trading within those barriers is favoured.
USD/JPY: in step with stocks
Support stands at 106.86 (Reaction low hourly), at 106.39/33 (Boll bottom/ Daily enveloped), at 106.04 (Week low), at 105.53 (05 Sept low).
Resistance comes in at 107.41 (STMA), at 108.03 (MTMA/daily envelope), at 108.55 (Boll Midline/Daily flag top), at 108.75 (LTMA), at 109.08 (Week high).
The pair is in neutral territory.
EUR/GBP
Yesterday, EUR/GBP extended the correction of the previous sessions. There were no eco data and the BoE members held a rather balanced approach in their appearance before the Parliament's Treasury committee as they acknowledged the economic downturn but continued to remain vigilant on inflation (and inflation expectations). EUR/GBP (more or less in step with EUR/USD) set an intraday low early in US trading at in the 0.7925 area but rebound later in the session to close the day at 0.7962 compared to 0.7987 on Wednesday.
Today, the UK eco calendar is empty. BOE's Tucher gives a speech at 12.30.
Last week EUR/GBP tried to break out of the longstanding sideways 0.7760/0.8098 trading range, but the test was rejected and this triggered a correction sending the pair lower in the previous range. As we turn more cautious on the EUR/USD decline short-term, the EUR/GBP correction might also shift into a lower gear. We hold on to our view that it is too early for a major/sustained comeback of the sterling. For now we stay neutral on EUR/GBP and look out whether yesterday's low will indeed be able to become a short-term support.
EUR/GBP sterling extends rebound, but
Support stands at 0.7958/51 (LTMA/Reaction low hourly), at 0.7922 (Daily envelope + Reaction low), at 0.7905/98 (MT reaction lows), at 0.7891 (Starc bottom).
Resistance is seen at 0.7980 (Reaction high hourly), at 0.7993 (STMA+ daily envelope), at 0.8003/16 (Previous reaction low/Breakdown hourly), at 0.8041/50 (Reaction high/MTMA).
The pair is moving into oversold territory.
News
US: Import prices fall significantly more than expected
The trade deficit widened more than expected in July (to 62.2 B), while the June figure was downwardly revised from -56.8B to -58.8B. Normally, both exports and imports decline during recessions, but this time both exports and imports increased, the latter mostly due to petroleum though. Ex-petroleum, the deficit narrowed to - 18.8B, illustrating that this months' deterioration in the deficit was broadly caused by higher oil prices.
In August, import prices fell sharply (-3.7% M/M), while the July figures were downwardly revised from 1.7% M/M to 0.2% M/M. On a yearly basis, the import price index declined from a downwardly revised 20.1% Y/Y to 16.0% Y/Y, while the consensus was looking for a more modest fall (20.2% Y/Y). Most of the decline was caused by a fall of -12.8% M/M in petroleum & products. We are now looking forward to see whether this severe plunge in import prices can be confirmed by today's PPI.
In the week ended September 6 initial claims fell by 6 000 to 445 000, while last month's figure was upwardly revised from 444 000 to 451 000. Continuing claims, which are reported with a one-week lag, rose 122 000 from a downwardly revised 3 403 000 to 3 525 000, while an outcome of 3 460 000 was expected. It is still important to note that claims have been elevated due to the Federal extension of unemployment insurance benefits, but with each passing week, the impact on the weekly claims fades. Nevertheless, the claims are at levels only seen in recessions and in recent weeks conditions are only worsening.
Disclaimer: This non-exhaustive information is based on short-term forecasts for expected developments on the financial markets. KBC Bank cannot guarantee that these forecasts will materialize and cannot be held liable in any way for direct or consequential loss arising from any use of this document or its content. The document is not intended as personalized investment advice and does not constitute a recommendation to buy, sell or hold investments described herein. Although information has been obtained from and is based upon sources KBC believes to be reliable, KBC does not guarantee the accuracy of this information, which may be incomplete or condensed. All opinions and estimates constitute a KBC judgment as of the data of the report and are subject to change without notice.
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* US Treasuries end volatile session slightly lower
Financial strains at first pushed Treasuries higher, but hopes on more government intervention put equities on a firmer footing later in the session, obliging Treasuries to head south. Eco data may be Treasury friendly today, but we suspect that the market is ripe for a correction, maybe on stronger equities.
* ECB still fears broad based second round effects
Yesterday, European bonds closed another volatile session almost unchanged. Although the technical picture is still bullish, the increased volatility over the past week suggests that the market remains vulnerable to some profit-taking. A fall below the uptrend line at 114.51 today would suggest that some downward correction is in the making.
* EUR/USD tests longstanding uptrend line. Decline to slow?
Global uncertainty made currency markets continue trading according to the established trading patterns. The yen was favoured; the dollar remains the second best while the euro fights an uphill battle. An easing of global market tensions (if it occurs) and some important technical support looming (especially in EUR/USD) might contain a trigger for EUR/USD sell-off to slow.
The Sunrise Headlines
* US Equities opened lower, but recovered on news that Lehman is in talks about a possible sale, driving also Asian stocks higher.
* Lehman Brothers says it is in serious talks about a possible sale after its share plunged more than 40% on Thursday; the Treasury and Fed were engaged in the talks.
* Washington Mutual is downgraded by Moody's to below investment-grade status as its access to debt and equity markets remains severely constrained. Washington Mutual responds that Moody's decision is inconsistent with their current financial condition.
* The Japanese economy shrank a bit more than originally reported in the second quarter raising fears that Japan is entering a recession as exports slow further.
* Oil continued its downtrend and has now approached the key $100 level, overnight fears about hurricane Ike drove oil slightly higher ($ 101.20).
* Today, the calendar contains exciting US data with the PPI, Retail Sales and Michigan consumer confidence.
Currencies: EUR/USD Tests Longstanding Uptrend Line
On Thursday, the same trading themes that were at work over the previous session continued to set tone for EUR/USD trading. Global economic and financially uncertainty, even if most of it comes from the US, still favours the yen (and to a lesser extent) also the US dollar. The euro fights an uphill battle. So, pressure on global stock markets also weighed on EUR/USD. EUR/JPY (temporary?) trading below the key 150/149 support area through the cross rates added to the negative pressure on EUR/USD. The intraday charts in EUR/USD also still have quite a high correlation with the oil price. So, EUR/USD set new lows around/just below the 1.39 mark around noon in Europe and early in US trading. In line with recent market behaviour, the US data (trade balance, PPI and claims) only had a temporary (negative) impact on the US dollar. Later in the session, the pressure on the stock markets eased (rumours that US authorities are engaged in negotiations with major banks to work out a solution for Lehman) and this also helped EUR/USD to move away from the lows. The pair closed the session at 1.3998 matching the close on Thursday.
Today, in Europe, the Industrial production data are on the calendar. In the US the PPI, retail sales and the Michigan consumer confidence are scheduled for release. Markets will in the first place be driven by global market factors (rumours on the measures that are expected over the weekend to stabilize the US financial system). (US) eco data recently at best only had an intraday impact on trading. This probably will remain the case today. Nevertheless, we will gradually grow more attentive on whether or not US eco data will show some improvement due the recent decline in oil prices.
Over the previous weeks, EUR/USD was caught in a forceful downtrend. The decline in the oil price and growing signs of deterioration in the European economy (and elsewhere outside the US) caused a sharp re-allocation in favour of the dollar. The dollar became favoured over the euro in case of global investor uncertainty, even if the source of that uncertainty comes from the US. The euro was often traded in line with other carry trade currencies, losing ground against the dollar and the yen in case of global market tension.
Longer term, we think that EUR/USD has turned the corner and if the fundamentals/ US eco data would gradually turn more positive (e.g due to the lower oil price), the dollar could gain further ground. Even if this week's market reaction was muted, the GSE measures over time might be a supporting factor for the US mortgage and housing market, too. As Europe and the rest of the world most probably lag the US, the eco environment could stay dollar constructive. However, the EUR/USD correction has already gone far and after such a strong move the chances for a period of consolidation or even some profit taking are growing. Easing global market tensions, e.g. in case of a Lehman solution this weekend may provide such a short-term trigger.
EUR/USD: tests longstanding uptrend line
Support comes in at 1.3925 (Reaction low hourly), at 1.3895/82 (Boll Bottom/ New reaction low + daily envelope), at 1.3852/40 (Previous July high/50 % retracement since 2005) and at 1.3773 (Starc bottom) and 1.3643 (2004 Dec low).
Resistance is seen at 1.4054 (STMA), at 1.4071/99 (Reaction high hourly/Breakdown hourly + daily envelope), at 1.4225 (ST high), and at 1.4345 (MTMA).
The pair is still in oversold conditions.
USD/JPY
From a technical point of view, the picture remains outright EUR/USD negative. The pair fell through a series of key support levels signaling a trend reversal and Yesterday EUR/USD even tested the high profile long-term uptrend line since 2002 (today at 1.3932).
For now the picture remains EUR/USD negative. However, yesterday EUR/USD painted a doji-like pattern on the daily charts and this could be a first warning signal that the downtrend is losing some momentum (in a day-to-day perspective). Further out the sharply downward oriented MTMA (today at 1.4345) and the previous low (1.4570) remain our first points of reference on the upside. A move above these levels would confirm a loss of momentum in the dollar rebound. To be honest, we would be surprised to see EUR/USD regain the 1.4570 area in a sustainable way. Nevertheless, in a day-to-day perspective some profit taking (or stop loss protection) on EUR/USD shorts is worth considering.
On Wednesday, ongoing global market tensions continued to support the yen. The pair started trading in Asia in the 107.87 area and gradually drifted lower during the European morning session and early in US trading to set an intraday low in the 106.05 area at the start of trading on the US stock markets. Easing pressures later in the session helped the pair to regain the 107-barrier later in the session. EUR/JPY showed a similar pattern; the pair set intraday-low in the 147.55 area but at the end of the day the pair was again close to the 150 mark.
This morning, Japanese data (final GDP and industrial production) had no impact on trading. Asian stocks post some cautious gains. However, the performance is again far from spectacular if compared to rebound late in US trading.
On the technical charts, USD/JPY staged a gradual rebound from the mid-July reaction low to set a new reaction high at 110.68 on August 15. Since then, the pair entered a consolidation pattern and gradually slipped through a series of support levels. Recently, USD/JPY trading is again closer related to what happens on the stock markets. This was yen supportive short-term. However, the yen tends to lose momentum as soon as the high profile negative headlines cool down. This could be the case if additional measures are taken to address the financial stress in the US. We still consider the pair as sideways oriented. A break above the MT reaction high (110.67) looks difficult to sustain. A drop below the 105.53 reaction low would make the picture more negative. For now, range trading within those barriers is favoured.
USD/JPY: in step with stocks
Support stands at 106.86 (Reaction low hourly), at 106.39/33 (Boll bottom/ Daily enveloped), at 106.04 (Week low), at 105.53 (05 Sept low).
Resistance comes in at 107.41 (STMA), at 108.03 (MTMA/daily envelope), at 108.55 (Boll Midline/Daily flag top), at 108.75 (LTMA), at 109.08 (Week high).
The pair is in neutral territory.
EUR/GBP
Yesterday, EUR/GBP extended the correction of the previous sessions. There were no eco data and the BoE members held a rather balanced approach in their appearance before the Parliament's Treasury committee as they acknowledged the economic downturn but continued to remain vigilant on inflation (and inflation expectations). EUR/GBP (more or less in step with EUR/USD) set an intraday low early in US trading at in the 0.7925 area but rebound later in the session to close the day at 0.7962 compared to 0.7987 on Wednesday.
Today, the UK eco calendar is empty. BOE's Tucher gives a speech at 12.30.
Last week EUR/GBP tried to break out of the longstanding sideways 0.7760/0.8098 trading range, but the test was rejected and this triggered a correction sending the pair lower in the previous range. As we turn more cautious on the EUR/USD decline short-term, the EUR/GBP correction might also shift into a lower gear. We hold on to our view that it is too early for a major/sustained comeback of the sterling. For now we stay neutral on EUR/GBP and look out whether yesterday's low will indeed be able to become a short-term support.
EUR/GBP sterling extends rebound, but
Support stands at 0.7958/51 (LTMA/Reaction low hourly), at 0.7922 (Daily envelope + Reaction low), at 0.7905/98 (MT reaction lows), at 0.7891 (Starc bottom).
Resistance is seen at 0.7980 (Reaction high hourly), at 0.7993 (STMA+ daily envelope), at 0.8003/16 (Previous reaction low/Breakdown hourly), at 0.8041/50 (Reaction high/MTMA).
The pair is moving into oversold territory.
News
US: Import prices fall significantly more than expected
The trade deficit widened more than expected in July (to 62.2 B), while the June figure was downwardly revised from -56.8B to -58.8B. Normally, both exports and imports decline during recessions, but this time both exports and imports increased, the latter mostly due to petroleum though. Ex-petroleum, the deficit narrowed to - 18.8B, illustrating that this months' deterioration in the deficit was broadly caused by higher oil prices.
In August, import prices fell sharply (-3.7% M/M), while the July figures were downwardly revised from 1.7% M/M to 0.2% M/M. On a yearly basis, the import price index declined from a downwardly revised 20.1% Y/Y to 16.0% Y/Y, while the consensus was looking for a more modest fall (20.2% Y/Y). Most of the decline was caused by a fall of -12.8% M/M in petroleum & products. We are now looking forward to see whether this severe plunge in import prices can be confirmed by today's PPI.
In the week ended September 6 initial claims fell by 6 000 to 445 000, while last month's figure was upwardly revised from 444 000 to 451 000. Continuing claims, which are reported with a one-week lag, rose 122 000 from a downwardly revised 3 403 000 to 3 525 000, while an outcome of 3 460 000 was expected. It is still important to note that claims have been elevated due to the Federal extension of unemployment insurance benefits, but with each passing week, the impact on the weekly claims fades. Nevertheless, the claims are at levels only seen in recessions and in recent weeks conditions are only worsening.
Disclaimer: This non-exhaustive information is based on short-term forecasts for expected developments on the financial markets. KBC Bank cannot guarantee that these forecasts will materialize and cannot be held liable in any way for direct or consequential loss arising from any use of this document or its content. The document is not intended as personalized investment advice and does not constitute a recommendation to buy, sell or hold investments described herein. Although information has been obtained from and is based upon sources KBC believes to be reliable, KBC does not guarantee the accuracy of this information, which may be incomplete or condensed. All opinions and estimates constitute a KBC judgment as of the data of the report and are subject to change without notice.
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Technical Analysis for Major Currencies
| Daily Forex Technicals | Written by Crown Forex | Sep 12 08 07:46 GMT | | |
EUROThe descending cahhnel will continue to dominate the pair as far as trading is below the 1.4110 level as it heads towards the 1.3845 target. We expect to see heavy fluctuations in the markets today between the 1.4110 level and 1.3845 level as we see a mix of signals concerning the direction of the pair on the intraday charts between the short and medium term trends. The trading range for today is among the key support at 1.3810 and the key resistance at 1.4190. The general trend remains to the downside as far as 1.5080 remains intact with targets at 1.4040 and 1.3860 Support: 1.3980, 1.3960, 1.3915, 1.3875, 1.3845 Recommendation: Sell below 1.4040 with targets at 1.3960 and 1.3850 and stop loss above 1.4120 GBPThe upside correction we pointed out yesterday continues and up till now there are no signs that support the continuation of this direction where we don't expect trading to be above the 1.7680 - 1.7690 level for long since this level is strong and the pair lachs enough bullish momentum on the intraday charts to breach it and therefore we believe the donwside direction will remain. However, if this level is breached we could witness another bullish wave targeting the level at 1.7750 - 1.7790 The trading range for today is among the key support at 1.7360 and the key resistance at 1.7770. The general trend remains to the downside assured by the breach of the 1.7800 level with targets at 1.7600 and 1.7280 Support: 1.7580, 1.7540, 1.7470, 1.7400, 1.7360 JPYEven with any decline we see no danger for the upside trend unless we witness a daily close below the 106.40 where from there we expect a neutral trend. The downside movements witnessed every now and then is normal where we can see similar movements had occured in the past and now we are watching the daily close and not the intraday price. At the end, trading above the 106.60 - 107.15 level supports the strong upside direction that will start at any moment as long as the pair is above the mentioned support level or else it will depreciate heavily targeting the 105.00 level. The trading range for today is among the key support at 105.70 and the key resistance at 109.20. The general trend remains to the upside as far as 103.00 remains intact with targets at 111.00 and 113.24 Support: 107.10, 106.80, 106.60, 106.00, 105.50 Recommendation Buy the pair above 107.35 with targets at 108.10 and 109.10 and stoop loss with daily close below 106.40 CHFNothing has changed since ysterday as the 50 day moving average on the hourly chart is providing the pair with bullish momentum supported by direction indicators that have strengthened after breaching the 1.1200 level. We expect the upside direction to remain for today targeting the 1.1390 - 1.1400 level at the very least as far as 1.1300 remains intact. The trading range for today is among the key support at 1.1200 and the key resistance at 1.1470. The general trend remains to the upside as far as 1.0570 remains intact with targets at 1.1025 and 1.1455 Support: 1.1310, 1.1285, 1.1250, 1.1200, 1.1110 Recommendation: Buy above 1.1350 with targets at 1.1390 and 1.1450 and stop loss below 1.1280 CADThe pair was able to near the 1.0825 target as it hit 1.0820 before reversing to the downside as this level represents a strong resistance. We now see the formation of a sideways pattern between the levels of 1.0695 and 1.0825 where trading within these levels does not indicate a specific direction unless the pair breaches the support or resistance. The medium term trend however remains clearly to the upside. The trading range for today is among the key support at 1.0625 and the key resistance at 1.0895. The general trend remains to the upside as far as 1.0350 remains intact with targets at 1.0825 and 1.1000 Support: 1.0695, 1.0660, 1.0625, 1.0575, 1.0500 Recommendation: Buy above 1.0695 with targets at 1.0755 and stop loss below 1.0660 disclaimer:The above may contain information for investors/traders and is not a recommendation to buy or sell currencies, gold, silver & energies, nor an offer to buy or sell currencies, gold, silver & energies. The information provided is obtained from sources deemed reliable but is not guaranteed as to accuracy or completeness. I am not liable for any losses or damages, monetary or otherwise that result. I recommend that anyone trading currencies, gold, silver & energies should do so with caution and consult with a broker before doing so. Prior performance may not be indicative of future performance. Currencies, gold, silver &energies presented should be considered speculative with a high degree of volatility and risk. | |
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Technical Analysis for Crosses
Daily Forex Technicals | Written by Crown Forex | Sep 12 08 07:37 GMT |
EUR/JPY
Not much has changed since yesterday as trading remains of high volatility within the same ranges. The EUR/JPY pair is still trading below the 100% correction for the medium term wave that started on 20-3-2008 where this level at 151.69 could be the target for any upside correction as indicated by the momentum indicators. A fail to breach this level and build a solid base above it will initiate a new downside wave opening the way to the 145.70s only if the 200 day moving average on the weekly charts at 150.24 was broken.
Support: 150.14, 149.67, 149.32, 149.03, 148.75
Resistance: 150.67, 150.88, 151.33, 151.62, 151.92
GBP/JPY
The GBP/JPY pair is still trading within narrow ranges between the 61.8% correction at 187.78 and the minor support at 188.76. Trading remains of low volume as momentum indicators try to adjust from being slightly oversold. We expect the pair to remain within this sideways pattern unless it is able to breach any of the mentioned levels. A good demand point for the pair is 187.78.
Support: 188.11, 187.78, 187.29, 186.87, 186.14
Resistance: 188.94, 189.52, 190.01, 190.67, 191.24
EUR/GBP
The Euro versus the Sterling once again found difficulty in breaching the 61.8% correction for the medium term upside channel at 0.7945 which is supported by both the 50 and 100 day moving averages. A breach of this mentioned level will take the pair to 0.7887 as our initial target yet we don't expect to see that anytime soon before witnessing the pair closing below the mentioned correction and confirming the downside movements. 0.7945 offers a good buying point for the pair.
Support: 0.7945, 0.7935, 0.7922, 0.7910, 0.7901
Resistance: 0.7976, 0.7989, 0.8004, 0.8016, 0.8025
Crown Forex
disclaimer:The above may contain information for investors/traders and is not a recommendation to buy or sell currencies, gold, silver & energies, nor an offer to buy or sell currencies, gold, silver & energies. The information provided is obtained from sources deemed reliable but is not guaranteed as to accuracy or completeness. I am not liable for any losses or damages, monetary or otherwise that result. I recommend that anyone trading currencies, gold, silver & energies should do so with caution and consult with a broker before doing so. Prior performance may not be indicative of future performance. Currencies, gold, silver &energies presented should be considered speculative with a high degree of volatility and risk.
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EUR/JPY
Not much has changed since yesterday as trading remains of high volatility within the same ranges. The EUR/JPY pair is still trading below the 100% correction for the medium term wave that started on 20-3-2008 where this level at 151.69 could be the target for any upside correction as indicated by the momentum indicators. A fail to breach this level and build a solid base above it will initiate a new downside wave opening the way to the 145.70s only if the 200 day moving average on the weekly charts at 150.24 was broken.
Support: 150.14, 149.67, 149.32, 149.03, 148.75
Resistance: 150.67, 150.88, 151.33, 151.62, 151.92
GBP/JPY
The GBP/JPY pair is still trading within narrow ranges between the 61.8% correction at 187.78 and the minor support at 188.76. Trading remains of low volume as momentum indicators try to adjust from being slightly oversold. We expect the pair to remain within this sideways pattern unless it is able to breach any of the mentioned levels. A good demand point for the pair is 187.78.
Support: 188.11, 187.78, 187.29, 186.87, 186.14
Resistance: 188.94, 189.52, 190.01, 190.67, 191.24
EUR/GBP
The Euro versus the Sterling once again found difficulty in breaching the 61.8% correction for the medium term upside channel at 0.7945 which is supported by both the 50 and 100 day moving averages. A breach of this mentioned level will take the pair to 0.7887 as our initial target yet we don't expect to see that anytime soon before witnessing the pair closing below the mentioned correction and confirming the downside movements. 0.7945 offers a good buying point for the pair.
Support: 0.7945, 0.7935, 0.7922, 0.7910, 0.7901
Resistance: 0.7976, 0.7989, 0.8004, 0.8016, 0.8025
Crown Forex
disclaimer:The above may contain information for investors/traders and is not a recommendation to buy or sell currencies, gold, silver & energies, nor an offer to buy or sell currencies, gold, silver & energies. The information provided is obtained from sources deemed reliable but is not guaranteed as to accuracy or completeness. I am not liable for any losses or damages, monetary or otherwise that result. I recommend that anyone trading currencies, gold, silver & energies should do so with caution and consult with a broker before doing so. Prior performance may not be indicative of future performance. Currencies, gold, silver &energies presented should be considered speculative with a high degree of volatility and risk.
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EURUSD, AUDUSD, EURCHF Daily Outlook
| Daily Forex Technicals | Written by E-Forex | Sep 12 08 06:40 GMT | | |
EURUSDThe US dollar remains stronger against the Euro on a short term basis although the Euro recovered on yesterday, closing above the 1.4 mark. Intraday momentum is slightly bullish and the Euro may extend its gains if the intraday support handle at 1.3975 holds. Near term resistance emerges at 1.4060 followed by 1.4100 and 1.4170 higher. Below 1.3975, support is also formed at 1.3930 and 1.3880/90. Current quote is 1.4027 @06:30 GMT Support levels: 1.3975, 1.3930, 1.3880/90, 1.3860 and 1.3760. AUDUSDResistance at .8100 is on focus and a potential break may open .8175 while on the downside, support starts at .8010 backed by .7950 and .7885. The daily charts are highly oversold while the intraday studies are slightly bullish while trading above the .8010 mark. Potential rallies are expected to be limited within the .8100-.8175 range. Current quote is .8060 @06:30 GMT Support levels: .8010, .7950 and .7885 EURCHFSupport into the 1.5850 region couldn't be broken on yesterday and the failed attempt followed by the fast recovery suggests that a climb towards the key resistance at 1.5990 is likely. However, the short term studies are bearish while holding below the said 1.5990 resistance so rallies are expected to be sold within the 1.5990-1.6020 range if reached. Current quote is 1.5926 @06:30 GMT Support levels: 1.5850, 1.5810 and 1.5750. Legal disclaimer and risk disclosure Past performance does not guarantee similar performance in the future. Our forecasts do not constitute an offer to buy or sell, or the solicitation of an offer to buy or sell any foreign exchange transaction. E-Forex.ro accepts no responsibility or liability whatsoever for any expense. We do not warrant or guarantee the accuracy, timelines or completeness to the service or informations you find here. | |
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FX Technical Analysis
| Daily Forex Technicals | Written by Mizuho Corporate Bank | Sep 12 08 06:30 GMT | | |||||||||||||||||||||||||||||||||||||||||||||||||
EURUSDComment: Another new recent low at 1.3881, dragged down by EUR/JPY, and in line with many other major currencies. We feel that the moves are caused mainly by the unwinding of 'carry trades' in their many guises rather than any sudden new attractions of the greenback. It has collapsed in eight of the last nine weeks, the biggest monthly collapse ever, and the Euro is grossly oversold. Strategy: Possibly attempt tiny longs at 1.4000; stop below 1.3800. Short term target 1.4200/1.4225. Direction of Trade: → Chart Levels:
GBPUSDComment: A very unusual chart pattern this week with a recent low at 1.7445: a possible 'spinning top' on the weekly chart. Be very careful as the pound is terribly oversold because the dollar is horribly and suddenly overbought. Sterling is doing better against some other currencies. Strategy: Possibly attempt tiny longs at 1.7600; stop below 1.7400. Short term target 1.7700, then 1.8000. Direction of Trade: → Chart Levels:
USDJPYComment: Yesterday's downside probe was deeper than we had expected underlining the fact that we are in the process of preparing to move to a new lower trading band. We should hold above 106.00 again today due to exhausted traders and nervy investors. Next week we should get going again. Strategy: Strategy remain unchanged: sell at 107.35, adding to 107.80; stop well above 108.25. Short term target 107.00, then 106.65. Direction of Trade: → Chart Levels:
EUR/JPYComment: Yesterday's slide to a low at 147.52, followed by a sharp bounce, suggests we have done enough for this week. Therefore expect consolidation today as we prepare for another massive slide later this month. Strategy: Sell at 150.50, but only if prepared to add to 152.50; stop well above 153.60. Short term target 149.25, then 147.55 again. Direction of Trade: →↘ Chart Levels:
Disclaimer The information contained in this paper is based on or derived from information generally available to the public from sources believed to be reliable. No representation or warranty is made or implied that it is accurate or complete. Any opinions expressed in this paper are subject to change without notice. This paper has been prepared solely for information purposes and if so decided, for private circulation and does not constitute any solicitation to buy or sell any instrument, or to engage in any trading strategy. | |||||||||||||||||||||||||||||||||||||||||||||||||
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