FXCC Market Review July 19 2012

Jul 19 • Market Reviews • 1954 Views • No Comments

US stock markets climbed yesterday, July 18th,  on surprising good news from Intel and followed by strong earning around the globe. US stocks gained on Wednesday, turbocharged by a rally in tech stocks and Federal Reserve Chairman Ben Bernanke’s comments, and undeterred by a slightly weaker Beige Book.

Negative sentiment turned to optimism. European markets closed mixed.

Asian markets this morning are trading up on the back of Wall Street.

Commodities are broadly stronger as are many of the commodity currencies.

After two days of testimony before the US congress, nothing new was revealed by Chairman Bernanke and his bleak economic outlook was put in the past.

It will be a quiet trading day with little due out in the way of market moving economic data. UK retail sales for June will be released and markets anticipate a 0.6% m/m print translating into 2.3% y/y growth following up on May’s robust 1.4% m/m number. Italy will release industrial orders data and HK will release its unemployment numbers as well.

Spain will auction bonds with maturities in 2014, 2017, and 2019. France will auction paper maturing in 2015, 2016, and 2017 as well as inflation linked notes maturing in 2019, 2022, and 2040. The UK will auction an ultra-long bond with a maturity of 2052.

Not much is expected in news flow or politics.

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Euro Dollar:

EURUSD (1.2290)  has retraced some of yesterday’s gain and is down 0.3% against the USD after Angela Merkel suggested she has some doubt that the European project will work. The EURGBP is at levels not seen since 2008. EUR is under pressure

The Great British Pound 

GBPUSD (1.5660) The Sterling is stronger as unemployment ( claimant count ) was reported better than forecast. The USD was also weaker in yesterday’s session. The pound is facing UK retail sales reports today, which are expected to be above forecast with the Queens Jubilee in June.

Asian –Pacific Currency

USDJPY (78.56) the pair broke out of its range to see the USD tumble to the mid 78 price. Traders are expecting intervention by the BoJ to support the currency.

Gold 

Gold (1579.85) tumbled in yesterday’s session but was able to reclaim some gains in early Asian trading as investors bought cheap gold with cheap US dollars. Gold is expected to continue to decline, with little eco data or central bank action to support any moves upwards

Crude Oil

Crude Oil (90.66) the overall fundamentals for oil are bearish, with supply remaining high and global demand low and forecasts tumbling. Yesterday’s EIA weekly inventory showed a drop of 0.8m barrels which energized the commodity. Also continued low level rhetoric from Iran and its trading partners have helped push prices upwards. In incident occurred in the Strait’s yesterday and a ship was fired upon but no complete details have been provide as of this writing

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