Market Brief

[Francesco]

Excellent Market brief

[Syed]

Stocks:
U.S. Stocks closed lower on Wednesday on bad ADP employment report. On Tuesday, the stocks found some respite from the recent selloff, triggered due to emerging market fears and global economic slowdown. ADP employment report showed that only 175,000 jobs were created in December below the expected 180,000.
At the close of U.S. trading, the Dow Jones Industrial Average fell 0.03% or 5 points to close at 15,440.29. At one point in trading session, the index dropped 100 points before recovering. The S&P 500 index slid 0.20% or 3.56 points down to close at 1,751.64. While the Nasdaq Composite fell 0.50%, dropping 19.97 points before closing at 4,011.55.
Another important economic data released on Wednesday was little better and provided some cushion to the falling stocks. The ISM services data came at 54.0 in January up against 53.0 in December.

Currencies:
The U.S. Dollar traded lower against its major rivals on Wednesday. Mixed economic data released today confused the investors who sought for the safe haven Japanese Yen. The ICE U.S. Dollar index which measures the Dollar’s strength against six rival currencies was 0.13% down to close at 81.13.
Euro traded higher against the U.S. Dollar after ADP employment data released from U.S. today showed less number of jobs were created. ADP employment report showed that only 175,000 jobs were created in December below the expected 180,000. The EUR/USD pair was 0.11% up at 1.3533. Data released from Eurozone showed slowdown in the Retail Sales figures.
British Pound traded lower against the U.S. Dollar on mixed sentiments after the economic data released today showed that U.S. ISM Services figures improved beyond forecast. GBP/USD pair traded at 1.6314 down 0.06%. Also, UK Service sector data released today showed the figure came down to 58.3 in January from 58.8 in December.
Japanese Yen traded higher against the Dollar on safe haven status after mixed economic data confused the investors. The USD/JPY pair traded at 101.35, 0.29% down. Also the Swiss Franc dominated the U.S. Dollar with USD/CHF pair down 0.03% to trade at 0.9034.

Commodities:
Oil prices eased on Wednesday on missing the weekly increase forecast figures. The Oil future prices settled for $97.32/barrel on Nymex after hitting session low of $97.24/barrel. The U.S. EIA informed in its weekly report that the Oil inventories missed the expected rise of 2.3 million barrels and came at 440K barrels. Also, the soft economic data released today from U.S. weighed on the Oil prices.
Gold prices gained some of their losses from the previous session on U.S. economic growth worries after ADP employment data showed that only 175,000 jobs were created in December below the expected 180,000. With lingering doubts about the economic recovery in U.S., the investors headed for safer asset class such as Gold and Japanese Yen. Gold April delivery futures were up 0.44% to trade at $1256.70/ounce. The gold prices touched session high of $1274.10 at one point of trading session. However, the ISM services sector data released today showed improvement. The ISM services data came at 54.0 in January up against 53.0 in December.

[Syed]

Stocks:
U.S. Stocks market made a huge comeback on positive Jobless Claims data. With the release of weekly U.S. Jobless Claims report on Thursday, the stocks rallied on the hope that the Friday’s employment report will show growth in the jobs. Official figures released by U.S. Labor Department showed that the Initial Jobless Claims fell by 20,000 to 331,000 from 351,000 in previous week, exceeding the expectation. The forecasted figure was a drop of 16,000.
The stocks rallied on the positive data to the highest in past seven weeks. The S&P 500 Index rose 1.2% to close at 1773.43 gaining 21.79 points in the process. Dow Jones Industrial Average Index followed the suit and jumped 1.2% adding 188.30 points to close at 15,628.53. Both indexes posted the largest gain since Dec 18^th. The Nasdaq Composite gained 45.57 points, jumping 1.1% to close at 4,057.12. “The recent decline in the stocks was the long awaited correction. S&P 500 index rose 30% last year and the Japanese counterpart Nikkei rose 57%, with major jumps like these, a pullback on profit taking is very natural and nothing to be panicked of. Whenever, the stocks rise to new heights, a correction follows and this is a natural cycle. We can’t expect the stocks to move in one direction all the time, people buying stocks at a low price would like to lock in some gains at higher prices” informed a senior trader from PCM Brokers.
Investors were turning their attention to Friday’s U.S. nonfarm payrolls report for January, hopeful the report will show the economy continues to improve.
Currencies:
U.S Dollar traded flat facing stiff competition from the major rival Euro on comments from ECB Chief Mario Draghi that conveyed positive sentiments about Eurozone. “Incoming information confirms that the moderate recovery of the euro area economy is proceeding in line with our previous assessment” he said. Dollar index which measures the Dollar’s strength against six rival currencies was 0.20% down to close at 80.99 extending yesterday’s decline. However, U.S. Dollar found some relief in this week’s Initial Jobless Claims data that fell by 20,000 to 331,000 from 351,000 in previous week, exceeding the expectation. The forecasted figure was a drop of 16,000. The EUR/USD pair traded up 0.40% at 1.3587
The U.S. Dollar fell against the British pound as well, the GBP/USD pair was up at 1.6322 rising 0.08%. Japanese Yen weekend against U.S. Dollar on the better than expected Jobless Claims data. The USD/JPY pair jumped 0.63% at 102.90.
Swiss Franc traded higher against Dollar with the USD/CHF pair down 0.3% at 0.9008. The Canadian Dollar and the Australian Dollar both traded higher against U.S. Dollar with the pair USD/CAD down 0.14% at 1.1068, AUD/USD up 0.58% at 0.8962.
Commodities:
Gold traded steadily on positive comments about Eurozone from ECB chief Mario Draghi who shrugged off the deflation fears. Draghi said the ECB sees a protracted period of low inflation, not full blown deflation, and reiterated that the bank is “monitoring developments closely" and won't likely make any decisions until the bank reviews more economic indicators. With Euro rising against the U.S. Dollar, gold being an anti-dollar commodity rose in synch with Euro. April delivery contract traded at $1257.40/ounce and touched session high of $1266.60/ounce 0.04% up from session low of $1252.80/ounce. The gold is likely to find support near $1240.60/ounce and face major resistance at $1274.10/ounce.
Oil prices rose on Thursday on upbeat Jobless Claims report that showed fewer people applied for the jobless benefits this week when compared to the previous. March delivery contracts on Nymex traded at $97.62/barrel up 0.25% before retracing from session high of $98.82/barrel. The oil prices eased in the previous session when U.S. EIA informed in its weekly report that the Oil inventories missed the expected rise of 2.3 million barrels and came at 440K barrels. The Brent Oil on ICE Exchange jumped 0.59% to trade at $106.88/barrel.

[Yousuf Ali]

Currencies market performed a quiet session on Monday as investors are digesting past week news from central banks decisions and US employment report. No data no catalysts in the American session leave the USD moving in little ranges and even no changes against the Euro.

The GBPUSD declined hard in the European session from 1.6735 to test March’s lows around 1.6620. The loss of support from UK bound M&A flows as well as spillover from last week’s ECB decision continue to underpin EURGBP short covering , in America the cable was sleeping around 1.6640 and it closes at 1.6645

The USDJPY opened the day with gains from 103.00 to reach levels around 103.40, however the movement was weak and the pair closed at 103.27.

The EURUSD moved sideways almost all the day with American session being even smaller around 1.3875. The Euro doesn’t want to fall against the USD and that’s all. Hourly chart shows a slightly bearish momentum with indicators heading lower around their midlines and price below a flat 20 SMA, while the 4 hours chart show indicators still in overbought territory, not yet suggesting a bearish correction ahead.

[Yousuf Ali]

News from china fueled risk aversion across the markets however majors remained in its previous range. The dollar posted some gains versus pound and euro but declined against the yen.

Stocks extended losses on Tuesday as disappointing earnings reports added pressure to the indexes. The gold advanced to 1350 area again but copper and oil traded under pressure.

The EURUSD pair declined to 1.3830 overnight but the pair managed to recover ground in the American session. In the 4 hours chart indicators also stand around their mid-lines, halting their slide from overbought territory, yet giving not much clues on upcoming direction. For the most the pair remains bullish, albeit a clear break above 1.3910 now required to confirm a new leg up.

The GBPUSD pair fell for third day to test the 1.6600 area in the last three session it lost around 200 pips from 1.6790 on Friday to bounce at 1.6600 today and close the day at 1.6675.

[Yousuf Ali]

The Forex space was once again dominated by rising tensions between Russian and Ukraine with reports of Russian troop build-ups along the Ukrainian border. The dollar was firm on positive data releases in the form of retail sales and initial jobless claims numbers. The Yen was also a benefited on risk aversion in risk-off markets.

EURUSD pair was offered form the off on Draghi commenting that the ECB are prepared to intervene on euro strength. The Euro has been as low as 1.3866 making for over a big figure of losses.

USDJPY pair extended earlier losses in Europe from 102.80 and marked a low of 101.78.

AUDUSD pair and NZDUSD pair both were damaged as Chinese GDP forecasts were lowered by a number of banks. The Aussie reached a low of 0.9011 and the Kiwi fell onto 0.8520.

[Yousuf Ali]

EURUSD pair and USDJPY pair advanced while GBPUSD pair traded sideways, where as Gold and Oil decline while US stocks rallied.

The serious reactions promised by the west were really soft sanctions limited to only 21 individuals. It was also interesting when Barack Obama said US hasn't decided yet in between to escalate or to de-escalate the situation. However, investors seem to have digested well the situation with riskier assets advancing in the day.

The EURUSD advanced for second day with the pair reaching its highest close since October 2011 at 1.3920. The pair seems now condemned to test the 1.4000 key price in special after past Friday Moody's upgrade to stable in the EU outlook. The pair looks neutral in the short term, however investors are waiting for the FED meeting next Wednesday to take their chances.

The GBPUSD pair remains to trade in range. Cable closed the day at 1.6655. The EURGBP pair is pressuring cable to the upside as Vodafone signed a deal to buy Spanish cable operator ONO for $10 Bn.

The USDJPY confirmed its bounce at 101.22 key level as the pair rallied to test Friday's high at 101.85, it closed at 101.75.

[Yousuf Ali]

Following the Mario Draghi's words of whatever it takes from the 80's band start-ship, Vladimir Putin seemed to say nothings gonna stop us now while he was signing the Russia's official annexation of Crimea. Market took it easy as USD was trading in range on the day while stocks rallied for the second day.

While the White house said the G7 will meet next week to study further sanctions. Crimea is almost officially a new part of Russia. Nothing more to say. Now markets focused on Wednesday's FOMC meeting and the first Janet Yellen appearance . Investors expect another $10 billion taper.

The EURUSD reached a new multi year high close on Tuesday with the pair finishing the day at 1.3932, highest close since October 2011. Upside remains intact and the 1.4000 seems inevitable. Anyway from a technical point of view the EURUSD hourly chart maintains the neutral tone. nothing shocking considering the pair has been trapped in 60 pips for the last 48 hours. In the 4 hour chart indicators present a mild positive tone but the fact that price holds near the year high supports an overall bullish tone.

The GBPUSD pair resume its downtrend as the cable broke below the 1.6600 area to close around 1.6590. USDJPY pair remained in previous days range around 101.40 where it wrapped up the day.

[Yousuf Ali]

The day was mainly US Dollar session with greenback consolidating recent gains. A strong Philly Fed number plus stronger US leading indicators fuel the dollar to new highs against major rivals.

Movements were however not as big as an investor could expect with EURUSD pair testing the 1.3750 area as 2-week low by mid session. Then the pair was moving sideways in consolidation mode. The GBPUSD pair declined for third day with the cable touching sub 1.6500 prices. Cable closed at 1.6500.

By midday, Barack Obama approved sanctions to Russia and then Russia approved sanctions to individuals in the United states too. A new way of war.

After the closing bell , the Federal reserve informed that only one bank failed its stress test. The institution was Zions Bank.

[Yousuf Ali]

Following a break below the 80.00 level in the dollar index chart, majors were shaken and almost all crosses rose against the greenback. However movement was not long lasting: a Chinese diversification again?

USD weakness looked to be due to technical factors as no fundamental catalysts were appreciated in the New York afternoon. The movement started after the European closing bell as the EURUSD pair jumped from 1.3780 to 3-day highs around 1.3875, around 100 pips flew in a matter of minutes.

EURUSD pair closed at 1.3835. The short-term picture is now bullish with the 4 hour chart showing current candle opening well above its 20 SMA and indicators heading north after crossing their mid lines to the upside.

The GBPUSD pair climbed 50 pips from 1.6485 to 1.66535, however the pair is right now trading at previous levels just below 1.6500. The AUDUSD pair jumped to 0.9150 briefly too, but it returned to 0.9125 where it finished. USDCAD pair declined below the 1.1200 area in the movement and it remains there. Gold collapsed to nearly 1-month lows around 1308/oz