Kiwi
Possible 3 drives pattern setup.

Daily Trade Recap – 27^th November, 2014

Headlines:

• OPEC leaves production quotas unchanged
• Russia warns of long-term weakness in oil prices
• ECB’s Weidmann says solid public finances let monetary policy work

Data:

• Canada Q3 current account deficit $8.4B vs $11.2B expected
• November 2014 German HICP flash 0.5% vs 0.6% exp y/y
• October 2014 French jobseekers 28.4k vs 15.0k exp
• Countries with fiscal space should use it says Draghi
• German GFK consumer sentiment Dec 8.7 vs 8.6 exp

Recap:

OPEC – Forget a Prius, just go get a 6.4 litre Hemi...

There was really only one market moving overnight whilst the US markets were celebrating Thanksgiving and that was Oil. The OPEC announcement that it would not cut output, nor would it strengthen compliance sent the black stuff straight back from whence it came in the largest one day fall that I have seen. At one point we were down $5.80. Currently we sit at 68.70, down $4.80.

Elsewhere the fall in oil markets bolstered the USD especially against the larger oil producers with the Danish Krona falling sharply. UsdCad closes the day higher by 87 points at 1.1340.

EurUsd sits at 1.2461, lower by 43 points. Cable at 1.5721, down 65 and UsdChf higher at 0.9645, up 33.

UsdJpy held the 117.49 support to close higher by 31 at 117.92, EurJpy pretty much unchanged on the day at 146.95.

Both Aussie and Kiwi close mildly lower on the session with the Aussie giving back all the earlier Asian session gains going out at 0.8517, down 14. Kiwi trades at 0.7856, down 20.

Precious metals both traded lower on the session as the USD rallied. Gold closes at 1189.60, lower by $8.00 and Silver sits at 16.22, down $0.29.

Over in the equity markets it was a quiet session with the Dax30 higher by 25 points at 9970 and right into resistance. As goes UsdJpy so goes the Nikkei which managed to hold the support at 17165 closing the session at 17285 lower by 35 on the day. US markets close the day mixed on light electronic trade with the S&P500 at 2070.38, down 1.75, the Dow30 at 17810, down 3 and the Nasdaq100 higher by 6.50 at 4325.48.

The Day Ahead:

With a half day trade in US markets expect thin liquidity conditions to continue.

On the blotter for the last trading day of November we have EU CPI and Unemployment data. Pre the European session we have plenty of Japanese data headed up by the CPI which could cause some Yen volatility. The Kiwi's get Building Permits and Business Confidence whilst here in Oz we get Private Sector Credit .

Technical Perspective:

WTI Crude

With the 50% Fibonacci support of the 35.09//114.79 rally completely obliterated, focus shifts to the 61.8% retracement level at 65.54 then the favourite 70.7% Fib at 50.44 Crude. Immediate resistance sits at the 50% of this weeks Marabuzo candle at 72.53.Whilst this resistance level holds, continue to expect the market to test the downside with the long term objective at 45.43 from the break of the wedge on the weekly chart.

From a Harmonic perspective the Bullish Butterfly pattern remains valid whilst price remains above the maximum PRZ point at 60.69 which coincides with the resistance turned support on the rally from 35.09.

Daily Trade Recap – 26^th November, 2014

Headlines:

• Iran won’t ask the Saudis for oil production cuts
• ECB sources: Sovereign QE decision in Q1 2015 largely agreed
• BOJ’s Shirai thinks it will take more than two years to reach 2% inflation target
• ECB looking to Q1 2015 before deciding on QE says Constancio
• BOE’s Haldane says markets don’t see rate hikes until end 2015

Data:

• US core durable goods orders -1.3% vs +1.0% exp
• October 2014 US personal income 0.2% vs 0.4% exp m/m
• Core PCE 0.2% vs 0.2% ex
• October 2014 US pending home sales -1.1% vs 0.5% exp m/m
• US initial jobless claims 313k vs 288k exp
• US Nov Chicago PMI 60.8 vs 63.0 expected
• US Oct new home sales 458K vs 471K exp
• November 2014 University of Michigan consumer sentiment final 88.8 vs 90 exp
• US DOE crude oil inventories +1946K vs +220K expected
• Q3 2014 UK GDP 2nd read 0.7% vs 0.7% exp q/q

Recap:

Quiet trade into the US Thanksgiving holidays despite a raft of weaker US data. USD marginally weaker on the session against the majors as were the US indices until a decent bounce late in the session brings us back to were we started the day.

Another good day for the German Dax30 up 36.25 at 9940.75 as it approaches the June 2014 highs at 10047.50. Nikkei 225 sits quietly at 17320 down 15 on the session with the local Aus200 closing slightly firmer at 5400 after failing to surmount the 100 DMA.

US markets slid early as US data disappointed, consolidating for most of the afternoon until a late day ramp which sees us close positive on the day. S&P500 closes at 2073.38, up 5 handles. Dow30 at 17820, +9 and the Nasdaq100 finishing strongly at 4321.48, higher by 28.25.

Gold continues to be trapped between 1191 and 1203 with the shiny stuff closing lower at 1197.09 despite the weaker USD. Silver likewise trades sideways and closes lower by 16 cents at 16.50.

WTI Crude was pretty much a non event and chopped around in a $1.82 range from the open completely ignoring the much larger than expected inventory number. We go out at 73.50 ahead of tomorrows OPEC announcement.

FX Markets focused on the weaker US data with the USD in reverse for most of the US session. EurUsd closes the day at 1.2505, +27 on the day. EurGbp sits at 0.7918, down 19. EurChf ran into an iceberg at 1.2015... we close at 1.2021.

The Yen pairs traded quietly with UsdJpy at 118.25 down 12 points, EurJpy slightly higher at 147.12, +12 and AudJpy managing a bounce from a look under par at 99.90 to close the day at 100.43, -37.

The commodity block had a mixed day with the Kiwi finding good support below 0.7800 going out at 0.7871, up 45 on the day. The Aussie again closes lower, but well off its 0.8479 lows to close the day at 0.8534. An unremarkable session in the Loonie closing the day at 1.1253, up 5 points from the open.

The Day Ahead:

Today's focus will be on the EU data with the German CPI, Unemployment and EZ Consumer Confidence being the main interest. The outcome of the OPEC meeting will also be closely watched. Australia gets New Home Sales, Private Capital Expenditure data.

Technical Perspective:

USDCHF

Early stages of a Head and Shoulder top under construction?

AUDUSD

A little more to go.....

Daily Trade Recap - 25^th November, 2014

Headlines:

• US GDP revisions upbeat overall but some analysts are still not convinced
• Three regional banks voted to hike discount rate in Oct – minutes
• OPEC edging toward compromise that would involve following quotas – WSJ
• Russia, Mexico, Venezuela and Saudi Arabia will ‘monitor oil prices for a year’

• RBA’s Lowe says lower AUD is helpful and sees a further drop over time
• Lowe says the RBA can still lower interest rates if they need to
• Carney sees substantial uncertainty about the estimate for slack in the economy
• Carney says MPC has considerable flexibility to provide extra stimulus if necessary
• Carney says he expects UK recovery to continue but remains an economy that requires stimulus

Data:

• Q3 2014 US GDP 2nd reading 3.9% vs 3.3% exp q/q
• November 2014 US Richmond Fed manufacturing index 4 vs 16 exp
• US Nov consumer confidence 88.7 vs 96.0 expected
• September 2014 Canadian retail sales 0.8% vs 0.5% exp m/m
• German Q3 GDP final qq SA +0.1% vs +0.1% exp/prev
• October UK mortgage lending hits the lowest since January 2014
• Spanish PPI Oct mm -0.5% vs +0.5% prev

Recap:

Aussie whacked by Lowe's comments; USD pressured lower after failing to rally on stronger than expected US GDP, then sold again after a miss on consumer confidence and Richmond Fed data coupled with decent demand for 5-10 year paper which pushed US rates lower; Oil sinks again as both OPEC and Non-Opec members fail to come up with anything constructive.

Mixed day for equity markets with the Nikkei lower on the day, down 90 at 17400. Aus200 managed to climb 32 and sits at 5355. The Dax30 closes in the black after German GDP comes in as expected at +0.1% at 9865.00 up 51.75 points.

US markets trade mixed in late US trade after Consumer Confidence and Richmond Fed data took the wind out of the early rally. The S&P500 trades down 2 tics at 2067.38, Dow30 at 17809, up 16 and the Nasdaq100 up 8.50 points at 4292.25.

The precious metals took advantage of a weaker USD with both making modest gains on the session. Gold closes at 1200.86 up $3.76 and Silver higher by 17 cents at 16.67.

WTI Crude heads back to 4 year lows as the main oil producers – Russia, Venezuela, Mexico and Saudi Arabia failed to reach any agreement on the current over supply of oil to the market. The latest breakdown in talks has the market anticipating that OPEC will not cut production from the current 30 million Barrels per day output. We close the day on the lows at 73.83, down $1.81. Late news that the CME has just hiked oil margins by 4% and a tweet from a senior Saudi energy jorno wont help things either..

The Aussie was the mover in the Fx arena with the currency sliding across the board after the RBA deputy governor Lowe's comments during the Asian session. We enter Sydney trade at 0.8528, down 75 against the USD. AudJpy at 100.59, -126. EurAud at 1.4618, +165 and back to last weeks high pre the Draghi put. GbpAud is back above 1.84 at 1.8406, +158.

Apart from the Aussie the USD closes the day lower across the board after it again failed to rally on better headline data continuing the theme of late of selling good US news... The EurUsd is back at 1.2473 higher on the day by 40 points. Euro crosses also close in positive territory with EurChf at 1.2026 and EurGbp at 0.7941, +21. EurJpy goes out down 14 at 147.14 but off its worst levels after a quick trip to 146.29 and back.

Cable closes mildly higher at 1.5705, up 7 points with the GBP caught in between USD and EurGbp flows.

UsdJpy closes lower on the session down 48 points at 117.96 in line with USD weakness and a bid tone in US 5 and 10 year notes.

The Loonie was the star of the little dollars completely ignoring the slide in oil instead strengthening on the stronger Canadian retail sales number pushing the UsdCad lower closing at 1.1257, down 32 points after early run at 1.1313 resistance. Kiwi closes the session lower in sympathy with its Aussie cousin at 0.7806, down 51 on the day.

The Day Ahead:

Today sees UK GDP out of Europe with a raft of US data later in the session. US Durable Goods, Personal Income and Spending, Chicago PMI, Uni of Mich Consumer Sentiment and US home sales data all on tap ahead of Thanksgiving on Thursday.

Technical Perspective:

Whilst not technical in nature....The theme of selling the USD on strong data continued overnight into the Thursday US Thanksgiving holiday and end of month. From a macro perspective though its hard to see any major weakness in the USD heading into the end of year when looking at the current state of play in the bond and equity markets.

With US 10's still yielding 2.26% against the German 10s – 0.748%, French 10s – 1.07%, Spain 10s - 1.92% and UK 10s - 2.01%, combined with a runaway US stock market its hard to see demand for US assets and therefore the USD ending any time soon.