Aus200

Still following the Dec 2013 - Jan 2014 fractal.

Where to next for WTI Crude?

We are into the 70.7//78.6 zone (59.44/52.15) which is a favorite bounce zone for crude.Whilst Im absolutely crap at EW, it appears that we are in W3 of 5, expect W3 to complete at 2.618 of W1 which sits at 52.73, just shy of the 78.6 at 52.15.
Immediate resistance sits at 61.275 the 50% of this weeks Marabuzo candle then above at 70.39. Ideally should W3 complete at 52.73 with the W4 retrace targeting the 38.2 of W3 at 73.72 before the final leg to 45.43 which would complete both the EW pattern and the measured move target from the breakdown of the symmetrical triangle.

Daily Trade Recap

Headlines:

• Die Welt: Lautenschlager, Mersch and Coeure oppose Draghi’s QE plans
• Draghi: The governing council will reassess in the new year
• Draghi: Early 2015 doesn’t mean the next meeting
• Draghi: For QE we don’t need unanimity
• Draghi: Staff have stepped up preparations for further measures
• Draghi: Wording on balance sheet wasn’t unanimous
• Draghi: Buying foreign assets would be tantamount to FX intervention
• Draghi: Inflation expectations still in a range that’s consistent on price stability
• ECB sees 2015 GDP at 1.0% versus 1.6% in Sept
• ECB sees 2015 inflation 0.7% vs 1.3% in Sept
• Latest projections don’t account for recent oil fall
• ECB projections shows investment to crumble in the Eurozone
• Constancio: ECB hasn’t taken any decision on QE
• Weidmann and Lautenschlaeger were against shift in ECB balance sheet language
• BBG: ECB said to prepare broad-based QE package for January meeting
• BoE leaves rates unchanged.
• BOJ’s Sato sees possibility of further slowdown in CPI gains
• Fed’s Fischer says ECB govt bond purchases would have positive effects
• Putin keen to curb speculation on rouble

Data:

• US initial jobless claims 297k vs 295k exp
• November 2014 Canadian Ivey PMI 56.9 vs 52.5 exp
• UK Halifax house price index Nov mm +0.4% vs +0.3% exp
• German Markit construction PMI Nov 53.5 vs 51.5 prev
• Eurozone retail PMI Nov 48.9 vs 47.0 prev

Comment:

It was all about the ECB after the BoE non event.

Whippy session overnight with the market reacting to yet another ECB QE no-yes-possibly-well maybe... Circus. As the comments and headlines flew out of Europe the news algos went into overdrive, sometimes running over each other in the process. In the end though, we aren’t that far from where the shenanigans began ahead of tonight’s US jobs jamboree.

The news algo's weren't just active in the Fx markets and were flat out in overnight equity markets as they pushed the indices from highs to lows and back again as the ECB news, data and headlines hit the tickers.

In the end though, we are pretty much back to where we began the day... The Dax30 was the only casualty on the day as a result of an ECB failure to launch (QE), it closes the day down 112 at 9901.25 after another failure above 10k.

The S&P500 sits in aftermarket trade at 2071.88, down ½ a point or 2 tics after a 15 ¾ handle range. The Dow30 trades at 17889, down 7 after a 128 point range with Energy stocks weighing.

The Nasdaq100 trades at 4313.48, higher by 0.98 of a point.

Closer to home the Nikkei225 closes lower by 40 at 17845 and the Aus200 sits at 5370, up 3.

Another muted session in the commodity sector. Gold trades lower at 1205.10, down $2.93. Silver at $16.45, up 6 cents and Copper higher at 2.91, up 4 cents.

WTI Crude currently sits right on the important 66.65 level, down 70 cents. A daily close below would encourage further losses.

Fx markets were all over the shop and close mixed. Eur finished the day firmer with EurUsd at 1.2377, higher by 64 but well off its 1.2455 high. Against the Pound, the Euro sits firmer at 0.7896, higher by 50 points.

Cable closes lower (mainly due to EurGbp) at 1.5672, down 18.

UsdChf was a big mover on the day trading in a 146 point range going out at 0.9712, down 61 but well off the earlier 0.9649 lows. Interestingly, EurChf saw sellers pushing down into solid 1.2020 bids.

UsdJpy finally broke the 120 handle after a few early attempts but couldn’t hold above. We close at 119.77, 9 down from where we kicked off. EurJpy sits firmer up 71 at 148.30 after a failed run at 149.00.

The commodity bloc close mixed on the day. The Loonie completely ignored the better Ivey PMI as weakness in WTI and Gold weighed, UsdCad closes up 17 at 1.1382. The beleaguered Aussie just cant catch a break after the strong Retail Sales data yesterday. Crosses did most of the damage overnight and sees the local unit go out down 17 at 0.8379. Daily channel support sits at 0.8330.

Kiwi closes higher on the day mainly through AudNzd cross selling. We close the day at 0.7776, higher by 27.

The Day Ahead:

Biggest data day of the month is upon us with the main focus of traders being tonights US Non Farm Payroll data release. There is nothing major due for Asia with just German Factory orders and Eurozone Q3 GDP before the US session.    

Kiwi - H1

Kiwi

Alternate AB=CD pattern target achieved on the hourly chart at 0.7730. Further weakness should be contained into channel support at 0.7708/18. Immediate resistance sits at  the 0.7782/94.

AudUsd Hourly

Australia Retail Sales for October: +0.4% m/m (expected +0.1%)

The Aussie remains under pressure despite the much stronger October read on Retail Sales. From a short term technical perspective near term support sits at this mornings lows at 0.8384, A break under this level would target the next support zone at 0.8364//0.8372 which is lower channel support and outer Kijun-Sen bands. 

At this point only a sustained break above 0.8438 would have us targetting  0.8463//0.8471.

Daily Trade Recap

Headlines:

• Bank of Canada: Sees signs of broadening recovery
• BoC: Output gap appears to be smaller than projected in Oct
• Saudi Arabia feels oil prices could stabilise around $60
• Fed’s Plosser: Waiting too long to raise rates risks rapid inflation build up
• Plosser: Data suggests Fed needs to raise now or soon
• Fed’s Brainard: Fed exploring targeting margin requirements
• Osborne: OBR forecasts UK 2015 GDP +2.4% vs +2.3% prev
• OBR sees 2014 budget deficit at 5.0% of GDP vs 4.9% prev
• France confirms 2015 public deficit to be cut to 4.1% of GDP
• EU says the Troika and Greece are still discussing budget issues

Data:

• November 2014 US ISM non-manufacturing PMI 59.3 vs 57.5 exp
• November 2014 US ADP employment report 208k vs 221k exp
• November 2014 US Markit services PMI final 56.2 vs 56.5 exp
• Q3 2014 US non-farm productivity final 2.3% vs 2.4% exp
• UK Markit/CIPS services PMI Nov 58.6 vs 56.5 exp
• Eurozone Markit services PMI Nov final 51.1 vs 51.3 exp
• Eurozone retail sales Oct mm +0.4% vs +0.5% exp
• Swiss Q3 GDP qq final +0.6% vs +0.3% exp
• German Markit services PMI final 52.1 vs 52.1 prev
• France Markit services PMI Nov 47.9 vs 48.8 exp
• Italian Markit services PMI Nov 51.8 vs 50.2 exp
• US MBA mortgage market index 347.0 vs 374.5 prior

Comment:

Muted session overnight with equities mildly firmer, USD firmer, Treasuries pretty much unchanged and the commodity space mixed.

Equity markets were mostly positive overnight with the S&P500 trading at 2072.01, up 5.63. Dow30 at 17894, up 26 and the Nasdaq100 the laggard trading at 4309.35, -0.10. Elsewhere the Dax30 closed the day up 33.5 points at 9994.25. The Nikkei225 continues to surge hand in hand with a weakening Yen up 130 at 17900. Locally the Aus200 ends the day higher by 22 at 5347.

Copper traded lower down 1 cent on the day at 2.868 and still inside Mondays Bullish reversal candle. Gold trades firmer on the day despite a stronger USD and trades at 1209.96, up $12.97 eyeing Mondays highs and channel resistance. Silver closes flat on the day at 16.41 after an early challenge of channel resistance at 16.60 proved too hard.

Energy markets go out softer on the day, Brent came under pressure after the Saudi comment with WTI Crude supported after EIA inventories showed a drawdown of 3689K vs exp surplus of 1750K. WTI trades in the after market at 67.33, down 39 cents. WTI remains stuck in between the 50% level of last week' s bearish Marabuzo candle on the weekly chart at 70.39 and the 50% of Mondays bullish reversal Marabuzo candle at 66.65.

Another good day for the USD against most pairs as data points had the markets see sawing early. GBP was the exception with Osborne putting a floor under the beleaguered pound, Cable trades at 1.5684, up 39 on the session. EurGbp lower by 70 points at 0.7847.

The Euro sank in European trading and never recovered as the USD held the bid throughout US trading. Tonight' s ECB meeting will determine what happens next... EurUsd trades on its lows at 1.2308, down another 78 points. EurChf dropped back to 1.2033 and EurJpy trades at 147.45, down 20.

It was all one way trade in UsdJpy with 120 now the next target for the bulls. We trade at 119.78, up another 60 on the day.

The commodity bloc were mixed on the day. The Aussie saw see-saw trade. The GDP miss sent it to its lows at 0.8388, just shy of the 0.8385 (AB=CD and 3 Drives target) before a bounce ensued, but a failure to overcome 0.8443 had us heading back to the 0.8400 handle. We close at 0.8401. The Kiwi closes the day down 42 points at 0.7758. Kiwi H1 also has a 3 Drives pattern with the ideal target at 0.7731. UsdCad closes mildly lower after a BoC chop during the rates announcement. We go out at 1.1368, lower by 33 points. BoC's Poloz is due in 30 minutes so caution is warranted as he tends to talk down the Loonie.

The Day Ahead:

A busy day ahead with BoC's Poloz out in 30 minutes.... Aussie gets Retail Sales and Trade data which could again put the local unit under pressure. The major data points though are the ECB and BoE rate announcements later in the day.

Swiss Q3 GDP qq final +0.6% vs +0.3% exp

Asian Session Recap

Headlines:

• Goldman Sachs – At 85 cents the RBA views the Australian dollar as still overvalued
• New Zealand Finance minister English: Forecast of 2.75% GDP growth in 2016 is `optimistic’

Data:

• Q3 GDP from Australia: +0.3% q/q (vs. expected +0.7%)
• China Services PMI for November: 53.9 (prior was 53.8)
• New Zealand Q3 Construction work +1.5% q/q (vs. +2.6% expected)
• JAPAN Markit services PMI for November: 50.6 (prior 48.7)
• China HSBC services PMI: 53.0 (prior 52.9)

Recap:

USD maintained most of its overnight gains in the Asian session especially against the Aussie after poor Q3 GDP data sent the currency lower. Equity markets were mixed as was the commodity space.

The Aus200 took some liking to the cavalcade of rate cut expectations now beginning to grow after the release of the Q3 GDP data we trade at 5335, up 10. Elsewhere the Nikkei trades lower by 45 at 17720.

Commodities trade mixed in quiet trade with Gold at 1200.72, +3.10 and Silver at 16.37, -7 cents. WTI Crude is down 38 cents at 67.34.

Apart from the losses in the Aussie, other currencies are barely changed from the open. UsdJpy sits at 119.14, down 4 points after an early attempt at 119.50 failed. EurUsd sits at 1.2380 down 6, Cable at 1.5645 flat and UsdChf unchanged at 0.9721.

The Aussie dropped the better part of 50 points on the announcement and has been as low as 0.8388 thus far 3 points shy of both hourly and weekly target levels at 0.8385. Daily channel support and the 4ATR band sits below at 0.8317. Kiwi also weaker on the day by 18 points at 0.7782.

Coming Up Tonight:

With the ECB out tommorrow as the main European event, tonight sees the release of Swiss GDP, European Services PMI, GBP Services PMI in that order. Later in the US session we have ADP Employment, Services PMI, ISM data and finally the Beige Book, The Canadians have the BoC rate decision with Governor Poloz speaking in the Asian morning. 

Aussie

AudUsd H1:

 Aussie is on final approach to H1 3drives target and down channel support at 0.8385. 

AudUsd W1  

The larger time frame has now fulfilled the measured move target of the AB=CD patternat 0.8403. Further losses cannot be ruled out as the main medium term target of the broken symmetrical triangle sits at  0.8228.

Daily Trade Recap 

Headlines:

• Fed’s Lacker says Fed should stay focused on goals
• Fed’s Fischer says low oil price good for US growth
• Fischer: If inflation heads lower Fed will keep rates at near zero
• Bini-Smaghi: ECB mandate needs an update

Data:

• October 2014 US construction spending 1.1% vs 0.6% exp m/m
• November 2014 US New York ISM 62.4 vs 55.0 exp
• US Nov vehicle sales 17.2m vs 16.8m exp
• New Zealand Fonterra global dairy price falls 1.1%
• UK Markit/CIPS construction PMI Nov 59.4 vs 61.0 exp
• October 2014 eurozone PPI -0.4% vs -0.3% exp m/m
• German car production and exports down sharply in November

Comment:

As I suggested yesterday, it was a 'Back n Fill' day over in the metals and energies with USD and US equities rallying on better than expected data and hawkish comments out of the FED's vice-chair Fîscher.

The better than expected data had US equity markets on the move in overnight trade with the S&P closing higher by 14.75 handles at 2065.88. The Dow30 is up 108 at 17865 with Chevron and ExonnMobil the best performers. The Nasdaq100 goes out at 4308.23, higher by 20.5 points.

The other stand out was the Japanese Nikkei225 at 17770, up 330 points. The AUS200 gave back some of yesterdays early gains as metals and oil gave back a little of yesterdays mammoth moves and closes at 5277, up 32. The German Dax30 closes lower at 9967 after the brief foray above 10,000 didn’t last with German car production weighing on the index.

The metals gave back a fraction of yesterdays gains helped along by the firmer USD. Gold goes out down $8.45 at 1197.32, Silver at 16.43, down 9 cents. Both precious metals remain in the medium term down channel with only a break of yesterdays highs signalling some consolidation to the last 5 months of decline. Copper sits at 2.887, down ½ a cent after an early swoon to 2.843.

WTI Crude closes the day at 67.63, down $1.37 but off its lows after testing the 50% level of yesterdays Marabuzo candle at 66.65. Near term levels to watch are a break of 66.65//69.66.

Over in Fxland it was all about the USD with the DXY surging to a 4 and a half year high. Strong data, Fischer's comments and US Treasuries on the decline pushed UsdJpy high and we go out just off the highs at 119.23, up 92 on the day.

The Euro saw losses all around with EurUsd down 85 points at 1.2383. EurGbp sits at 0.7918 down 7. EurJpy sits a few points higher at 147.67 but off the 148.18 highs. EurAud closes down 53 at 1.4650.

Cable gave up all of yesterdays gains as weaker than expected construction data weighed. We close down 96 points at 1.5637.

The commodity bloc was on the backfoot after yesterdays moves. Aussie in particular closes lower after the post RBA moves were eroded as the US unit rallied and commods eased back. We open Sydney trade at 0.8451, lower by 27 on the session. Likewise the bird gave back nearly all of yesterdays gains closing lower by 66 points at 0.7795.The Loonie sank with the UsdCad back up above the 1.14 handle at 1.1402 up 83 points and through the 50% Marabuzo line of yesterdays candle.

The Day Ahead:

The most important data points of the week being tomorrows ECB meeting and Fridays US jobs jamboree are now the focus of most traders until then in the Asian zone today we have Aussie Q3 GDP, Chinese Non-Manufacturing PMI and the HSBC Services PMI the main data points to watch.

Asian Session Recap 

Headlines:

• Japan official: Declines comment on Moody’s downgrade of Japan debt
• RBA – NO CHANGE – likely to be a period of stability in interest rates

Data:

• New Zealand ANZ Commodity Price Index: -1.6% m/m (prior -0.8%)
• Australia Q3 BoP Current Account balance: -12.5bn (vs. expected -13.5bn)
• Australia Building approvals for October: +11.4% m/m (vs. expected +5.0%)

Recap:

Quiet day in Asian trade. Aussie higher on no change from the RBA. Equity markets firmer. Metals and Oil subdued.

The Nikkei225 currently trades near its highs at 17665, up 225. Aus200 firmer by 37 at 5282. US Indices also trading in the electronic markets slightly firmer.

Gold trades at 1208.35, +$2.58 and Silver at 16.43, up 9 cents.

WTI Crude trades down 47 cents at 68.53

Aussie trades on its highs after “No Change” from the RBA and better than expected Building data. We currently trade at 0.8529, +50. Kiwi trades quietly at 0.7879, +18.

The majors also trade in narrow ranges and are basically unchanged on the session ahead of the arrival of European trading desks.

Coming Up Tonight -

The UK gets Construction PMI with Janet Yellen speaking later in the US session the main events for the day. US minor data for release includes: Redbook sales, ISM, and Construction spending.

Daily Trade Recap 

Headlines:

• Moody's cuts Japan sovereign rating to A1 from AA3
• Swiss Gold Referendum – No vote wins by an easy margin

Data:

• November 2014 US ISM manufacturing PMI 58.7 vs 57.8 exp
• November 2014 US Markit manufacturing PMI final 54.8 vs 55.0 exp
• November 2014 Canadian RBC manufacturing PMI 55.3 vs 55.3 prior
• Eurozone Markit mftg PMI final Nov 50.1 vs 50.4 flash
• November 2014 UK Markit/CIPS manufacturing PMI 53.5 vs 53.0 exp
• German Markit mftg Nov final 49.5 vs 50.0 flash
• French Markit mftg PMI final Nov 48.4 vs 47.6 exp
• Spanish Markit mftg PMI Nov 54.7 vs 52.6 prev
• October 2014 UK BOE consumer credit 1.087bn vs 0.900bn exp
• Swiss Nov PMI 52.1 vs 55.3 prev
• China manufacturing PMI data for November: 50.3 (expected 50.5)
• China – HSBC manufacturing PMI: 50.0 (vs. flash of 50.0)

Comment:

What a difference a day makes... Massive moves in the metals and Oil. USD and  equities lower.

Massive moves were afoot for the first trading day of December for no particular reason other than the market got itself too one sided..The Asian session kicked off with gap lower opens across the commodities and commodity currencies and the AUS200 continuing on from last weeks drubbing.

After the initial gaps and news of the Swiss No vote, most markets settled in for a big day of PMI data across the globe. Despite the lacklustre Chinese PMI's the market was sideways into the European session kick-off with exception of the AUS200 which was pummelled.

When the European session kicked off , and kick off it did,,, The market looked intent on gap closes and it all began there with the US traders turning the reversal into something resembling carnage for the shorts.

WTI Crude closes the day +$4.71 at 69.01 from the mornings opening low at 63.71 and into minor resistance at 69.66. Weekly Marabuzo resistance sits at 70.39.

Not to be overshadowed by oil the metals saw a huge day. Gold opened the day at 1166.90 sliding to 1142.62 before the bounce ensued and bounce it did.. at one stage up $78.38 before some profit taking came in closing the day at 1205.83. In percentage terms, Silver was where the real action was at one stage up 17% on the day. After the initial slide to 14.34 we close at 16.35, +$2.01. Copper also posted a solid day +12.4 cents. It should be noted that both Gold and Silver held channel resistance so look for a pullback after such massive one day gains.

A weaker day for the global equity markets with the AUS200 the whipping boy early in line with commodities. As the commodity bloc recovered it prompted a bounce with the index closing that day lower by 52 at 5245 but well off its 5183 low from earlier in the day. The Nikkei225 goes out flat despite the Moody's credit downgrade. The German Dax30 closes the day a little higher than where it opened at 9954.75.

US indices were dragged lower on the back of the big energies in the early going with the Nasdaq100 the hardest hit. Nasdaq100 closes the day at 4587.75, down 39.75. The S&P500 closes down 12 handles at 2051.13 and the Dow30 at 17758, down 49.

Whilst all the big action was in the commodities those moves combined with the PMI data had the Fx markets moving as well. The USD gapped higher on the open against most pairs and then reversed.

The Loonie was always going to be the big gainer given the moves in metals and oil. UsdCad goes out at 1.1320, down 138 points from the Asian high at 1.1458. 1.1256/1.1386 covers support and resistance near term. Aussie and Kiwi both gained on the day although much less than one would have thought given the moves in commodities. Aussie closes at 0.8478 ahead of today's RBA meeting, Building Approvals and the Current Account. Kiwi goes out at 0.7862, up 71.

Euro closes the day mixed against the majors. EurUsd closes up 6 at 1.2469. EurGbp sits at 0.7924, down 41 on slightly better UK manufacturing data. EurJpy closes lower by 44 at 147.53 with the moves in UsdJpy doing most of the driving.

Cable closes firmer on the day up 86 at 1.5733 after the early test of recent lows at 1.5584 held.