Forex
31 March 2010
John J. Hardy, FX Consultant, Saxo Bank
JPY crosses blast higher again as Tanknan and a new Japanese financial year await in Asia. Are JPY crosses fairly priced here?
31 March 2010
John J. Hardy, FX Consultant, Saxo Bank
A negative US March ADP report looks interesting considering consensus expectations for a strong showing at this Friday's Change in Nonfarm Payrolls. Also - Euro is making a comeback attempt in places - will it succeed?
31 March 2010
Michael Schmeja, Global Head of Derivatives Sales, Saxo Bank
Month/Quarter/Fiscal year end flows are going to dominate today’s trading and I can only warn the punters of you not to ruin your Easter with a cheap punt. We will probably have erratic moves during the course of the day and IF you need to get involved pick an option and trade your delta/gamma around it
31 March 2010
Christian Blaabjerg, Chief Equity Strategist, Saxo Bank
Plenty of data out today; watch out for Chicago PMI, but don't pay to much attention to the ADP Employment Change as an indicator of Friday's Nonfarm Payrolls. The difference between the two is likely to be big for March due (mainly) to Census Hiring.
31 March 2010
Andrew Robinson, FX Analyst, Saxo Capital Markets
The EUR gave back most of the gains made during the Asian session yesterday with pressure coming from worsening news out of Europe – Ireland’s “Bad Bank” indicating it will apply a discount of 47% vs. 30% initial estimate on blocks of bad loans, Greek bonds trading poorly with tepid demand for the 12-year auction, an IMF downgrade to German growth and a rumoured French ratings downgrade (subsequently denied with Fitch affirming the AAA rating
30 March 2010
John J. Hardy, FX Consultant, Saxo Bank
Interesting test of the FX market lies ahead with end of month/quarter and Japanese financial year on tap tomorrow, together with US data risks later this week and the Easter holiday over the weekend and potentially pivotal series of US treasury auctions next week.
30 March 2010
John J. Hardy, FX Consultant, Saxo Bank
Commodity currencies are keeping the upper hand over the G3 weaklings on Chinese equity resurgence. Will the G3/commodity currency fault line continue to define this market?
30 March 2010
Michael Schmeja, Global Head of Derivatives Sales, Saxo Bank
Since beginning of this week we try to prepare ourselves for this holiday-thinned week while at the same time shouldn’t forget that we have NFP’s on Friday. Tomorrow’s US ADP might therefore be used as a proxy for Friday while we still have enough liquidity in the market. We also have months end quarter end, and fiscal year end in Japan tomorrow.
30 March 2010
Andrew Robinson, FX Analyst, Saxo Capital Markets
After the excitement in early Asia yesterday, most currency pairs (and especially EURUSD) were mired in tight ranges overnight. Markets were less than impressed with the high price Greece had to pay for its 7-year issuance (310bp over benchmark mid-swap rate and more than 5 times the yield premium of comparable Spanish debt) but at least the EUR held mid-range. The pound struggled, but kept its head above water after S&P maintained its negative outlook on the UK (though affirmed its AAA rating) while UK data was mixed (mortgage approvals softer but M4 money supply firmer).
30 March 2010
Christian Blaabjerg, Chief Equity Strategist, Saxo Bank
Greece saw poor demand for its 7-year auction of EUR 5bn and the CDS quickly responded and ended the day 23bps higher.
29 March 2010
Mads Koefoed, Macro Strategist, Saxo Bank
The savings rate heads south as Americans spend a larger share of their income. Consider the latest report from the Bureau of Economic Analysis, which shows that personal consumption grew 0.3% in February while personal income was stagnant. Taking into account the growth seen in January of 0.3% and 0.4% in income and spending, respectively, the first quarter is on track to register a healthy gain of 4.4% annualized in personal spending.
29 March 2010
John J. Hardy, FX Consultant, Saxo Bank
The USD rally that looked so promising last week is faltering ahead of an onslaught of big US economic data event risks. Will the USD fade or find new legs?
29 March 2010
Christian Blaabjerg, Chief Equity Strategist, Saxo Bank
Concerns about the situation in Greece continues to recede with the CDS down roughly 50 bps during the past week. We buy on dips in equities.
29 March 2010
Andrew Robinson, FX Analyst, Saxo Capital Markets
The USD was generally softer across the board in Friday’s session as the draft EU agreement on the Greek bailout, follow-up supportive comments from EU officials, S&P’s affirmation of Portugal’s debt rating (in contrast to Fitch’s downgrade) and a firmer US Michigan confidence reading all conspired to promote better risk appetite.
26 March 2010
John J. Hardy, FX Consultant, Saxo Bank
Euro closes strongly for the week - more to come next week?
26 March 2010
Michael Schmeja, Global Head of Derivatives Sales, Saxo Bank
NZDUSD: I have been filled on my order at 0.7050 and sold 50% of the option I bought 1.5 weeks ago (NZD Put 0.7075) I received 48 USD pips versus the 35 USD pips I have paid. The position is now closed for a net profit of 60 USD pips on half of the notional. I would have needed a bit more spot movement to trade my gamma. Looking back Implieds have been much higher than the actual spot movements (historic) and while we can’t say we would have had only favorable spot moves, it clearly didn’t help that spot wasn’t moving much and we had a lot of gamma “bleeding”.
EURCAD: It looks like we are having a bullish engulfing pattern today and on a re-test of 1.3700 I would enter a long EUR Call, but that’s for Monday.
26 March 2010
John J. Hardy, FX Consultant, Saxo Bank
The Euro Has surged across the board into today's session - a sign that the worst may be over for the single currency for the moment? And how does risk want to finish the week after a crazy reversal yesterday?
26 March 2010
Michael Schmeja, Global Head of Derivatives Sales, Saxo Bank
The rescue deal is out but we are still waiting for any relief rally in the Euro. Volatility picks up on a negative news and spot towards 1.3200, vols get sold when it looks like we head towards 1.3400 on positive news. We have some expiries today at 1.3400-13480 which could dominate in a Friday afternoon the direction, but that’s a weak call.
26 March 2010
Christian Blaabjerg, Chief Equity Strategist, Saxo Bank
New agreement btw Germany and rest of EU: combined IMF and EU aid to Greece would be allowed, if unanimous decision in E-Z countries.
26 March 2010
Andrew Robinson, FX Analyst, Saxo Capital Markets
It took a while for markets to decide whether to extend the dollar’s current surge, but the bulls eventually won out. An early short squeeze was soon given back and the EUR came off to fresh lows into the close after ECB’s Trichet voiced his objection to the IMF getting involved in any Greek bailout plan. GBP attempted to rally on the back of what looked like a strong retail sales number but, given the suspect nature of this data series, this was soon rejected and we pushed below Asian lows.
25 March 2010
John J. Hardy, FX Consultant, Saxo Bank
Trichet lashes out again on announcement of Greek IMF deal. The EU tensions take EURUSD to a new low. But which currencies are at most risk if this move in risk aversion continues?
25 March 2010
Michael Schmeja, Global Head of Derivatives Sales, Saxo Bank
We have seen the biggest move in USDJPY since yesterday. Unsurprisingly the yield spread have moved very much in favor of the USD and we spiked to highs of 92.42. The trigger was a push through the 200d MA and some real money interest to buy a huge volume of USDJPY. In consequence volatility picked up to cover topside and short date 1 m atmfwd moved up by about 0.5/0.6 and trades at 10.60/11.00 now. There are some expiries today at 92.00 and you would except spot to stay around there but stop keep ramping it higher.
25 March 2010
John J. Hardy, FX Consultant, Saxo Bank
Today has seen a chunky consolidation in the greenback's huge rally from yesterday. Will the move higher in the greenback survive the week?
25 March 2010
Christian Blaabjerg, Chief Equity Strategist, Saxo Bank
Fitch downgraded Portugal to AA- from AA yesterday while the US Treasury saw a large tail in its 5-year auction.
25 March 2010
Andrew Robinson, FX Analyst, Saxo Capital Markets
The main over-riding theme of yesterday’s session was one of USD strength with a few minor sideshows also playing a part in currency moves. The EUR’s slide, which had begun with a break of key support levels near 1.3440 late in the Asian session, accelerated as Fitch announced a downgrade of Portugal’s credit rating to AA- with a negative outlook.
24 March 2010
John J. Hardy, FX Consultant, Saxo Bank
Huge move higher today in USDJPY - will it stretch even further in weeks to come?
24 March 2010
John J. Hardy, FX Consultant, Saxo Bank
The greenback takes a machete to the rest of the G-10 in today's trading, taking the dollar index to a new 10-month highs. USDJPY smashes higher through key barriers. Will the move hold?
24 March 2010
Nick Beecroft, Senior Markets Consultant
Don't expect anything too earth-shattering in today's budget announcement-one has to suppose it'll be almost exclusively populist by nature and aimed squarely between the eyes, or rather at the wallet, or swing voters.
24 March 2010
Michael Schmeja, Global Head of Derivatives Sales, Saxo Bank
Finally we get some action and the barriers at 1.3400 in EURUSD have been taken out. As expected there was some follow through selling and volatility in EURUSD extended their highs. The benchmark 1 month atmfwd is trading at 10.30/10.75, so a good 1.5 vols higher than the lows seen last week.
24 March 2010
Christian Blaabjerg, Chief Equity Strategist, Saxo Bank
The Euro weakened further as Germany and France indicated that the IMF would be required to step in and provide a bailout package for Greece.
24 March 2010
Andrew Robinson, FX Analyst, Saxo Capital Markets
Markets were broadly still range-bound yesterday, despite positive momentum in equity markets in Europe and the US. CHF proved to be the main mover of the day as EURCHF touched new lows below 1.43, despite SNB’s Hildebrand trotting out the familiar SNB line on countering excessive gains in the CHF. The EUR had a brief bounce as German press reported that France and Germany had agreed upon an IMF role in the Greek situation (but note conflicting story on Reuters reporting Merkel said no agreement on a bailout for Greece at the summit). However gains proved short-lived as markets focused more on the longer-term implications for the EU as a whole and the actual Euro-zone framework, and the uncertainty surrounding the announcement.
23 March 2010
John J. Hardy, FX Consultant, Saxo Bank
Market not impressed with suggestion that Germany and France will let Greece turn to the IMF for help. Meanwhile, the risk bulls have taken risk appetite to very interesting levels. Implications for FX? Read on...
23 March 2010
John J. Hardy, FX Consultant, Saxo Bank
The SNB trots out the usual rhetoric on franc appreciation, and the market remains distinctly unimpressed. Where is the bottom for EURCHF? Risk took a pause but is trying to edge to new highs ahead of the US open.
23 March 2010
Michael Schmeja, Global Head of Derivatives Sales, Saxo Bank
Another dull Asian session and a very slow morning in Europe has left us pretty much unchanged to yesterdays levels. There is not much interest in the brokers market for any particular pair or trade so not much to report. Volatility in EURUSD and EURCHF remains firm as long as we have the pressure on 1.3500/1.3400 and 1.4300 in EURCHF. USDJPY keeps on trading around 90.00/90.50 and with more expiries with these strikes coming up in the next I do not expect spot to move.
23 March 2010
Christian Blaabjerg, Chief Equity Strategist, Saxo Bank
The US House Price Index (consensus at -0.8% MoM) and US Existing Home Sales (consensus at -1.1% MoM and Saxo Bank at -2.6% MoM) are potential market triggers today. Also watch out for UK price data.
23 March 2010
Andrew Robinson, FX Analyst, Saxo Capital Markets
It was a definite session of two halves yesterday as the risk aversion theme extended early into the European session, only to reverse direction later. The EUR had a quick push lower through 1.35 towards the February lows, but stalled and rebounded strongly as some (relatively) positive comments emerged. With only second-tier data releases out of the US (for the record Chicago Fed Activity was soft at -0.64 versus -0.04 previously), it was left to Wall St to provide direction for currency markets.
22 March 2010
John J. Hardy, FX Consultant, Saxo Bank
Today's big risk comeback erases all of the downside from the option expiry circus in the US on Friday and the poor openin. But does risk have further legs to run on from here?
22 March 2010
John J. Hardy, FX Consultant, Saxo Bank
Risk aversion and fresh worries on the Greek situation (and EU situation as a whole ahead of this week's summit) have EURUSD probing new lows. Commodity and risk sell-off also pounding the commodity currencies, particularly the kiwi.
22 March 2010
Michael Schmeja, Global Head of Derivatives Sales, Saxo Bank
With Tokyo on holiday we had a slow start into the week. With a EURUSD and GBPUSD under pressure we had the trend of lower vols removed and trade nearly 1 vol higher compared to end of last week. It is fair to assume that for the time being a stronger USD in these crosses will lead to higher volatility while a weaker USD sees vols decline. However the picture looks different for USDJPY and AUDUSD where volatility remains offered.
22 March 2010
Christian Blaabjerg, Chief Equity Strategist, Saxo Bank
The US House passed Obama’s Health Care bill yesterday and the USD strengthened. EURUSD stopped short of 1.35 – key level.
22 March 2010
Andrew Robinson, FX Analyst, Saxo Capital Markets
There were no US data releases to dictate sentiment on Friday so early in the session it was left to Canada to pick up the reins. The CPI was higher than expected (more dramatically so on the core inflation reading) and retail sales also beat forecasts so the CAD was well supported early on. However, the first rate hike in a while from India, hiking 25bp to calm an economy that looked to be heading towards overheating, pulled commodities back and the CAD gains soon ran out of steam. As commodities retreated, so commodity-block currencies also fell back and a general mood of risk aversion crept into markets into the close of session.
19 March 2010
John J. Hardy, FX Consultant, Saxo Bank
Lots to ponder this weekend after the week ends with interesting developments on the charts - just a one off blip in risk on triple witching or is there more afoot?
19 March 2010
John J. Hardy, FX Consultant, Saxo Bank
CAD blasts stronger again after very supportive data. Wall street looks at how to finish off this week with the punch bowl. Today is also triple witching day.
19 March 2010
Robin Bagger-Sjöbäck, Research Analyst
Ever since the dust from the subprime explosion in 2007-08 settled, increased attention has been devoted to economists in the media advocating the significance of the second wave of refinancing US home mortgages.
19 March 2010
Michael Schmeja, Global Head of Derivatives Sales, Saxo Bank
We had lots of noise last night in EURCHF from SNB’s new member Mr. Dantine – and volatility spiked. We have now taken out levels of 1.4600 – 1.4400 with a week and there is talk of more sizeable barriers at 1.4300. The benchmark 1 month atmfwd vol is up by about 1,5 vols compared to last Friday, trading around 4.4/4.80.
19 March 2010
Christian Blaabjerg, Chief Equity Strategist, Saxo Bank
Quiet day data-wise, so focus is on Greece and the Euro.
18 March 2010
John J. Hardy, FX Consultant, Saxo Bank
Traders pile on the EURCHF shorts on unexpectedly frank (pun intended) mention of an eventual SNB exit from its current interventionist policy.
18 March 2010
John J. Hardy, FX Consultant, Saxo Bank
Euro suffers weakness again on suggestions that Greece will need to go to the IMF for relief. Complacency measures are getting extreme.
18 March 2010
Christian Blaabjerg, Chief Equity Strategist, Saxo Bank
Germany poured some cold water on risk sentiment with the remark that Greece should go to the IMF instead of the EU.
17 March 2010
John J. Hardy, FX Consultant, Saxo Bank
Nervous risk bulls can't quite keep the stampede into the NY close.
17 March 2010
John J. Hardy, FX Consultant, Saxo Bank
Bunds are close to trading at the lowest yields in almost a year - what might this mean for EURJPY. Any PIGS angle here either?
17 March 2010
Michael Schmeja, Global Head of Derivatives Sales, Saxo Bank
As I wrote yesterday vols would come off with the FOMC out of the way, especially in EURUSD and GBPUSD where the front end and also the risk reversals have come under pressure. The world looks rosy again, emerging market currencies like TRY and ZAR are bid again along the usual candidates like AUD and NZD. NZD 1 month benchmark vol trades around 11.20 and there has been some interest in the market for high strikes.
17 March 2010
John J. Hardy, FX Consultant, Saxo Bank
The dollar index nudged to new lows since early February - is it danger of a capitulation or will it make a stand?
17 March 2010
Nick Beecroft, Senior Markets Consultant
The BOJ's decision to double it's policy-rate lending facility for banks from 10trn Yen to 20 trn Yen may be the first of gradually enacted series of moves, set to appease government pressure to fight deflation.
17 March 2010
Christian Blaabjerg, Chief Equity Strategist, Saxo Bank
The FOMC was dovish and the Bank of Japan also held rates steady while doubling its credit lending programme to $222bn.
16 March 2010
John J. Hardy, FX Consultant, Saxo Bank
The FOMC statement largely in line with expectations, but fairly strong reaction in interest rates in the US.
16 March 2010
John J. Hardy, FX Consultant, Saxo Bank
The greater the consensus, the bigger the surprise. So how can the FOMC surprise the market today?
16 March 2010
Michael Schmeja, Global Head of Derivatives Sales, Saxo Bank
The FOMC is keeping us busy but assuming a “non-event” there, vols will come off. We trade around 9.35 in the 1 month atmfwd and that could be tested. With cable being on the offer after Fridays spike this seems the only pair which is a bit more underpinned. In EURCHF we are focusing now on options barriers at 1,4500 and more downside and gamma selling once these levels break.
16 March 2010
Christian Blaabjerg, Chief Equity Strategist, Saxo Bank
The FOMC meeting (18:15 GMT) tonight is the main event today. We do not expect a change in the Fed Funds Rate.
15 March 2010
John J. Hardy, FX Consultant, Saxo Bank
A stronger USD today keeps the USD index in its tight range once again. Will the range hold in the wake of a "no expectations" FOMC on tap for tomorrow?
15 March 2010
John J. Hardy, FX Consultant, Saxo Bank
Did the Chinese premier tip his hand on the yuan revaluation issue? Two big central bank meetings this week - the Fed and the BoJ - will they produce anything of interest
15 March 2010
Michael Schmeja, Global Head of Derivatives Sales, Saxo Bank
Updated: I got exercised at 1.0250 out of my USD Put, so I am long at 1.0205 (1.0250 -0.0045 premium).
In general I am a bull but I didn’t like the price action last week. So I will leave an order to sell my position at 1.0245 overnight to see where we are when I come in tomorrow.
15 March 2010
Christian Blaabjerg, Chief Equity Strategist, Saxo Bank
Credit spreads are continuing to narrow and the VIX is pushing for new lows. Corporate CDS prices are also lower and the S&P500 is making new highs.
12 March 2010
John J. Hardy, FX Consultant, Saxo Bank
Interesting intraday reversals in risk make a mishmash of the JPY crosses, though EURUSD, GBPUSD and USDCAD all show the USD struggling a bit ahead of next Tuesday's FOMC meeting.
12 March 2010
John J. Hardy, FX Consultant, Saxo Bank
EURUSD trying to decide what to do after a very strong US retail sales release. USDJPY is off to the races again after the data pushed bonds lower again. Next week features two key central bank meetings.
12 March 2010
Michael Schmeja, Global Head of Derivatives Sales, Saxo Bank
Volatility stays offered as nobody wants to own the weekend and we can only hope that next week’s FOMC and other data will bring us more action. Most guys in the market have been long vol at beginning of the week expecting the rollercoaster spot ride to continue. Now with spot ranges so tight theta (time decay) starts to hurt but the bids move left and more left.
12 March 2010
Christian Blaabjerg, Chief Equity Strategist, Saxo Bank
If we close above 1150 today in S&P 500 and open higher on Monday we could have a strong signal for further strength in the near future with our sight set on the 1200 mark.
12 March 2010
John J. Hardy, FX Consultant, Saxo Bank
Our latest monthly look at the big picture in FX - 14 pages full of charts, information and commentary.
11 March 2010
John J. Hardy, FX Consultant, Saxo Bank
An easy day to forget, though we have a chart for today that may be of interest. US Retail Sales data up tomorrow.
11 March 2010
John J. Hardy, FX Consultant, Saxo Bank
EURUSD can't get a move going either way as rally attempt was cut short after the US data release. USDCAD is trying back above 1.0300 after the favorable US trade number. More important US and Canadian data on tap for tomorrow.
11 March 2010
Christian Blaabjerg, Chief Equity Strategist, Saxo Bank
A whole host of figures from China: New Yuan Loans moderating significantly (but higher than expected) at 700B. Retail Sales strong, but Industrial Production a lot weaker than expected and AUD and ASX200 are down with commodities under pressure as well.
10 March 2010
John J. Hardy, FX Consultant, Saxo Bank
A chaotic data for the most risk sensitive currency pairs as US equities couldn't decided whether to take new high ground and ahead of the Australia employment report. RBNZ was out with dovish guidance.
10 March 2010
John J. Hardy, FX Consultant, Saxo Bank
JPY on the ropes again suddenly as the MoF and BoJ wrangle over what to do about Japanese deflation. AUD/NZD poised at key levels ahead of tonight's RBNZ as the market looks for guidance on the timing of the bank's first hike.
10 March 2010
Michael Schmeja, Global Head of Derivatives Sales, Saxo Bank
It has been a pretty dull day here in Asia at least around volatility in the markets. All major pairs are more or less unchanged to the London/New York close. As mentioned on Monday we have some significant expiries this week, also in terms of size, in the majors in EURUSD around 1.3600 and in cable at 1.5000 and 1.5010. 1.3600 seem very pivotal at the moment and if we don’t get any fresh news I would expect volatility to drop further.
10 March 2010
Christian Blaabjerg, Chief Equity Strategist, Saxo Bank
The GBP has performed poorly overnight. Watch out for today's industrial production.
10 March 2010
Andrew Robinson, FX Analyst, Saxo Capital Markets
It was another session with very little in the way of data releases to latch on to, so markets were left range-bound again overnight. A general mood of “risk off” permeated through markets for most of the early session, with the JPY and USD benefitting the most. GBP was hammered early in the session as a very weak trade number came on the back of soft RICS report. GBPUSD slumped to a one week low before staging a comeback into the close as risk appetite also reversed. EUR was also under early pressure as ratings agency Fitch was out on the wires saying the UK’s sovereign profile had deteriorated “pretty badly” while Portugal may be downgraded on insufficient fiscal measures. On the Greece front, they added that the current rating was appropriate but in Spain the macro risks remain high.
09 March 2010
John J. Hardy, FX Consultant, Saxo Bank
Another day of hesitant moves in FX, though CAD and AUD are generally stronger as all cylinders are firing in risk appetite.
09 March 2010
John J. Hardy, FX Consultant, Saxo Bank
Bonds perk up again and so does the JPY - just a deeper retracement or or JPY crosses in danger of a renewed fall? USD trying to rally again, as the dollar index has officially gone nowhere for over a month now.
09 March 2010
Christian Blaabjerg, Chief Equity Strategist, Saxo Bank
Today will be another quiet day in terms of macro and company data. UK Trade Balance at 09:30 GMT is about as exciting as it gets today.
09 March 2010
Andrew Robinson, FX Analyst, Saxo Capital Markets
A muted session overnight with few data releases of note to drive sentiment and direction. EUR was mildly positive at the onset as a result of leftover bullishness from Friday’s move, but barely managed above 1.37 versus the USD before reversing. German industrial production was below forecast (+0.6% m/m vs. +1.0% expected, +1.6% prior) and took some of the shine off the EUR while Moody’s caution on Portuguese banks escalated the slide. GBP was again an under-performer following comments from BOE’s Barker, and came under increasing pressure in the Asian session.
08 March 2010
John J. Hardy, FX Consultant, Saxo Bank
Another boring Monday - or does it have bigger implications than the relatively docile trading ranges suggest?
08 March 2010
John J. Hardy, FX Consultant, Saxo Bank
FX and risk appetite trying to pick up where last week left off. How much gas is left in the tank for this rally in risk appetite?
08 March 2010
Michael Schmeja, Global Head of Derivatives Sales, Saxo Bank
With payrolls out of the way the markets are back in risk mood and vols are being sold off. Downside risk has been reduced (EURUSD & GBPUSD) with the USD a touch on the back foot after Friday. The 1 month EURUSD Risk Reversal a good indicator still favors EUR Puts but did come down to 1.25. Spot is still in familiar ranges (1.3400/1.3800) and the week is full with good size maturities around a pivot of 1.3650/1.3700.
08 March 2010
Christian Blaabjerg, Chief Equity Strategist, Saxo Bank
A good report from the US labour market on Friday (Nonfarm Payrolls fell 36K vs. -68K expected while the Unemployment Rate held steady at 9.7%) could lead stocks higher today - helped by Sarkozy's fairly bullish comments.
08 March 2010
Andrew Robinson, FX Analyst, Saxo Capital Markets
The details of the US non-farm payroll report gave risk bulls the ammunition they needed to drive risk, and risk currency pairs, higher into the weekend. Adjusting the headline -36k number for ex-census workers and weather-linked distortions then some pundits are suggesting that the number translates to a positive closer to 20k, yet pessimists would highlight that the previous month’s data was revised higher ( -26k versus -20k) and average hourly earnings were below forecast at +0.1% versus +0.2%.
05 March 2010
John J. Hardy, FX Consultant, Saxo Bank
A big rally on Wall Street as the market decides that the glass is half-full at the moment. Not much in the way of event risks until next Thursday and Friday.
05 March 2010
Ole S Hansen, Senior Manager, Saxo Bank
Investors continue to blow hot and cold as the economic outlook remains uncertain and the sovereign debt problem is not going away. The dollar rally ran out of steam during the early parts of the week as traders decided to book some profit ahead of the monthly U.S. employment rapport.
05 March 2010
John J. Hardy, FX Consultant, Saxo Bank
The US employment report was marginally positive today, but risk seems to be uncorking the champagne in its initial reaction to the data, and this of course means a weaker USD and especially weaker JPY at the moment. However the market settles today is likely to set the direction for the coming week or more.
05 March 2010
Nick Beecroft, Senior Markets Consultant
The Euro’s reaction to the latest Greek developments has resembled nothing more than the proverbial ‘dead cat’ bounce. The package of measures recently announced by Greece was meant to draw a line under the debt concerns which have bedevilled Euro since its recent 25th Nov 2009 high against the dollar at 1.5144.
05 March 2010
Michael Schmeja, Global Head of Derivatives Sales, Saxo Bank
We didn’t see lot of changes to general volatility levels in Asia and Europe and I guess we will see a slow morning until the cat is out of the bag. I have long ago stopped to predict these numbers as I find it a useless exercise as the price action after the numbers is mostly unpredictable and very often doesn’t match the number. However if you have a strong view, do it via options.
05 March 2010
Christian Blaabjerg, Chief Equity Strategist, Saxo Bank
• Key risk today is the NFP and Unemployment Rate in the US. We warn our clients that both measures could show very large surprises today (due to the weather conditions and record changes in the US Labor Market Participation Rate in February).
05 March 2010
Andrew Robinson, FX Analyst, Saxo Capital Markets
The USD rebounded overnight ahead of tonight’s non-farm payroll release with the biggest gains recorded against the JPY. US data was a mixed bag with jobless claims and non-farm productivity beating forecasts but pending home sales extremely weak and factory orders below forecast.
04 March 2010
John J. Hardy, FX Consultant, Saxo Bank
A few key crosses are at important levels as we head into tomorrow's US employment report. Today's action in USDJPY was especially interesting.
04 March 2010
John J. Hardy, FX Consultant, Saxo Bank
The Japanese MoF expanded its intervention funds – is it already mixing it up in USDJPY today or is the move just a result of similar moves in the US bond markets after today’s jobless claims release? Markets still seemed poised on a fulcrum ahead of tomorrow’s US employment report.
04 March 2010
Michael Schmeja, Global Head of Derivatives Sales, Saxo Bank
A very quiet Asian market and a slow start in Europe. In Asia USDJPY gamma initially got sold even with spot under 8850, but with the last move down to 8830, we're starting to see the market paying the offers. Risk reversals being so low would mean some potentially painful moves to the downside.
04 March 2010
Christian Blaabjerg, Chief Equity Strategist, Saxo Bank
The EUR has bounced somewhat from the bottom and there might be more in the bounce to come, but rallies should most likely be capped around 1.3840 (trendline resistance)
04 March 2010
Andrew Robinson, FX Analyst, Saxo Capital Markets
The details of the Greek austerity plan helped put a floor under the EUR though related comments took some of the wind out of the rebound. While the EU is urging coordinated backing for Greece, Germany in particular still appears reluctant to support. The Greek plan includes a 2% hike in VAT rates, cuts in public sector bonuses, increases in taxes on fuel, tobacco and alcohol as well as a freeze on state-funded pensions for this year. The measures are expected to slash the deficit by €4.8 bln and late in the session Moody’s commented it would maintain their A2 rating if the austerity measures were acted upon.
03 March 2010
John J. Hardy, FX Consultant, Saxo Bank
Greek debt spreads continue to contract as Greece announces further austerity measures. US ADP number is in-line, but what will the US ISM non-manufacturing report tell us about the state of the US economy?
03 March 2010
Michael Schmeja, Global Head of Derivatives Sales, Saxo Bank
Markets have calmed down a little and we are awaiting some news about Greece. We haven’t seen any particular large interests in the options market overnight. The Risk Reversals in EURUSD and GBPUSD continue to be bid for the downside, however short term we see a better interest to buy upside strikes after we have seen spot bounce in EURUSD and Cable from the lows.
03 March 2010
Christian Blaabjerg, Chief Equity Strategist, Saxo Bank
The ADP Employment report is out today and the potential for a surprise to the downside is due to the cold weather (blizzards) experienced in February in the US.
03 March 2010
Andrew Robinson, FX Analyst, Saxo Capital Markets
GBP enjoyed some respite yesterday after the massive sell-off the previous day and passed the baton over to the EUR which endured a rollercoaster ride throughout the session. Early weakness saw the EUR hit a 10-month low before a smart rebound/short-squeeze as news broke of a Greek austerity plan and pledges of EU aid. UK data was marginally disappointing with PMI construction stuck below the 50 mark.
02 March 2010
John J. Hardy, FX Consultant, Saxo Bank
RBA hikes and suggests at further hikes to come, though remains unspecific as to timing. The BoC passed on a hike as expected, but removes dovish language from its statement this time around. The rest of the week offers a minefield of event risks. Stay tuned!
02 March 2010
Michael Schmeja, Global Head of Derivatives Sales, Saxo Bank
Is Great Britain the Greece of today and tomorrow? The market, rich or poor, doesn’t like the thought of a hung parliament and Sterling volatility reflects just that. The best way to play this is via options and that’s why we continue to see the downside of cable and the upside of EURGBP in demand.
02 March 2010
Nick Beecroft, Senior Markets Consultant
Sterling has sailed into a Perfect Storm of negativity. Not only is it assailed by political uncertainty as the Conservative Party poll lead evaporates, raising the ugly spectre of a 'hung' Parliament, with Labour forming the largest party. It also has to contend with Prudential's monster $35bn acquisition of AIG's Asia operation, AIA. How much foreign exchange selling of sterling to raise these dollars will this deal imply?
02 March 2010
Christian Blaabjerg, Chief Equity Strategist, Saxo Bank
The flash estimate for Eurozone CPI (FEB) is out today (10:00 GMT) and the consensus of expectations is for 0.9% year-on-year.
02 March 2010
Andrew Robinson, FX Analyst, Saxo Capital Markets
The pound grabbed the headlines overnight as it was flattened across the board with a mix of concerns about a possible hung parliament, the BOE meeting on Thurs and talk of a huge M&A deal (AIA/Prudential) all combined to pressure the pound. The push through 1.50 against the USD coincided with a break above 0.90 in EURGBP and pressure on GBP intensified to its lowest since May 2009. Next on the under-performance list was the SEK as the currency paused after its recent meteoric rally after Q4 growth data showed the economy slipping back into recession and Q3 growth was revised lower, back into negative territory.
01 March 2010
John J. Hardy, FX Consultant, Saxo Bank
GBPUSD finding resistance at 1.5000 so far. The Aussie and the Loonie pushing stronger on strong risk appetite ahead of RBA and BoC on Tuesday.
01 March 2010
John J. Hardy, FX Consultant, Saxo Bank
The pound on life support on nervousness ahead of election and large M&A deal. Two central bank meetings on tap - the RBA tonight and Bank of Canada tomorrow. What are the implications?
01 March 2010
Michael Schmeja, Global Head of Derivatives Sales, Saxo Bank
Shorter dated vols well supported from the start of the week as market participants expecting 4 C. Bank rate decisions (RBA and BoC on Tuesday, ECB and UK MPC on Thursday) and US NFP takes stage on Friday. 1 m ATM in AUDUSD traded 500mio today, also we saw pick up in AUDCAD vols ahead of tomorrow’s event.
01 March 2010
David Karsbøl, Chief Economist, Saxo Bank
The Saxo Bank Forex Portfolio Model had a 2.1% return for the month of February. You can now download the March model.
01 March 2010
Christian Blaabjerg, Chief Equity Strategist, Saxo Bank
We are bullish on risk today and buy on dips in equities.
01 March 2010
Andrew Robinson, FX Analyst, Saxo Capital Markets
Despite it being the last trading day of the month, Friday’s session was a relatively subdued affair when compared to previous month- ends. The USD saw some general, but mild, weakness into the end of the month with data points a mixed bag.
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