25 September 2009 at 7:57 GMT
Daily Trading Stance
· The Fed apparently was not done on Wednesday, because yesterday they announced that they would reduce the liquidity-inducing programs TAF and TLSF. The announcement indicates that the Fed believes that the economy is strong enough to recover without as much additional liquidity. Combined with very poor Existing Home Sales (-2.7% vs. 2.1% expected) the dollar got some much needed support while stocks dropped quite a bit.
· Jobless Claims were the bright spot yesterday and was a good deal below the consensus of expectations. Let’s see if the trend can be sustained now that we are entering some critical months for the job market.
· Announcement of banks share offering and disappointing US homes sales makes equities retrace. Further news on banks losses and recapitalization needs will most likely make equities head south.
· The US dominates data-wise today. Watch out for New Home Sales – will they disappoint too?
Calendar
| US | 12:30 | Durable Goods Orders MoM (AUG) | 0.4% | 4.9% | |
| US | 14:00 | U. of Michigan Confidence (SEP) | 70.5 | 70.2 | |
| US | 14:00 | New Home Sales MoM (AUG) | 1.6% | 9.6% | |
FX
| EURUSD | 0/- | Prefer to sell rallies to 1.47 for a break of 1.4620 with 1.4550 target. Stop abv 1.4750. |
| USDJPY | 0/- | Sell rallies to 91.0 for a re-test of low 90s, stop abv 91.40. |
| EURJPY | 0/- | Sell rallies to 133.30-50 for a push down to low 132s. |
| GBPUSD | 0/- | Look to sell rally to 1.6030 for 1.5850 tgt, stop abv 1.6070. |
| AUDUSD | 0/- | Rally seen limited to 0.8725. Sell there for 0.86 again. |
Equities
| DAX | 0/- | Sell on rallies towards 5633 and target 5586. Stop above 5650. |
| FTSE | 0/- | Sell at the break of 5091 and target 5052. Stop above 5101. |
| S&P500 | 0/- | Sell around 1058 and target 1051. Stop above 1060. |
| Nasdaq100 | | |
| Dow Jones | | |
FX-Options
| EURCHF | Market was dominated by aggressive buyers of frontend EUR puts and sellers of EUR calls by bigger Swiss banks which would could see a potential move to the downside. |
| USDJPY | Vols were firmer this morning as spot tumbles to session lows. Risk reversals are slightly better bid and middle part of the curve is finding decent support. |
| AUDUSD | Front end seeing good bids in Asia as selling eases. However a return to 8650-8700 range would likely bring gamma sellers back once again. |
Futures
| Gold | 0/- | Near-term suppt at 990 may hold but sell rebound near 1,000 for a 980.0 target. |
| Silver | 0/- | Temp suppt seen just abv 16.0 but expect to break for a 15.80 target. Sell rallies. |
| Oil | 0/- | Further downside expected to target the 64.0 lvl. Sell rallies near 67.0 resistance. |