News and Events:
The Dollar fell against major currencies on Thursday ahead of a government report expected to show the US economy lost more than half a million jobs in December for the second month in a row. Worries about the US labor market took center stage after an ADP survey earlier this week pointed to steep job losses in the private sector. It showed private-sector job cuts of 693k, economists have revised downward their forecasts for US nonfarm payrolls in December to show job losses of 550k, from an original estimate of 500k. Weekly jobless claims data showed the number of Americans on the unemployment rolls rising to a 26-year high. The Dollar had rallied in the first days of 2009, helped by the US stimulus package that many hope would pull the economy out of recession. But that optimism was short-lived as most recent US data reignited fears of a prolonged slowdown.
The Yen traded broadly higher as falling global stocks and weak sales at top US retailer Wal-Mart tempered the market's appetite for risk and renewed fears about the global economic outlook. Sterling, meanwhile, bounced to 3-week highs against the Dollar and Euro after the Bank of England cut interest rates by 50bp, as expected, to 1.5%.
EurUsd rose 0.6% to 1.3697 after falling to an intraday low of 1.3535. EurJpy was 0.88% lower at 125.18. GbpUsd rose 1.01% to 1.5224 having hit 1.5373 high. UsdJpy was down 1.46% at 91.39. UsdChf lost 0.85% to 1.0943
Today Key Issues:
* 07:00 EUR November German Retail sales 0.4% vs -1.6% (mom)
* 07:00 EUR November German Retail sales -0.1% vs -1.5% (yoy)
* 07:45 EUR November French Industrial output -0.8% vs -2.7% (mom)
* 07:45 EUR November French Trade balance -€6.5b vs -€7.06b
* 08:00 EUR ECB's Trichet speaks at a conference in Paris
* 09:00 NOK November Consumer Price Index 2.1% vs 3.2% (yoy)
* 09:00 NOK November Core inflation 2.4% vs 2.7%
* 09:00 NOK November Retail sales -0.4% vs -0.9%
* 09:30 GBP November Industrial output -0.6% vs -1.7% (mom)
* 09:30 GBP November Industrial output -5.3% vs -5.2% (yoy)
* 09:30 GBP November Manufacturing output -0.7% vs -1.4% (mom)
* 09:30 GBP November Manufacturing output -5.3% vs -4.9% (yoy)
* 09:30 GBP December PPI Core output -0.3% vs 0.2% (mom)
* 09:30 GBP December PPI Core output 4.8% vs 5.1% (yoy)
* 09:30 GBP December PPI Input prices -2.3% vs -3.3% (mom)
* 09:30 GBP December PPI Input prices 2.8% vs 7.5% (yoy)
* 10:00 EUR November Euro zone Retail sales 0% vs -0.8% (mom)
* 10:00 EUR November Euro zone Retail sales -1.6% vs -2.1% (yoy)
* 11:00 EUR November German Industrial output -2% vs -2.1% (mom)
* 12:00 CAD December Employment rate 6.5% vs 6.3%
* 13:15 CAD December House starts 170k vs 172k
* 13:30 USD December Manufacturing Payroll -100k vs -85k
* 13:30 USD December Non-farm Payroll -550k vs -533k
* 13:30 USD December Unemployment 7% vs 6.7%
* 13:30 CAD November Building permits -5% vs -15.7%
* 15:00 USD November Wholesale inventories -0.8% vs -1.1%
* 17:30 USD Fed's Lacker speaks on financial conditions, Maryland
The Risk Today:
EurUsd Market traded as high as 1.4720 in December but reversed most of its gain down to 1.3313 low on Tuesday. Renewed strength may look for 1.4867 23rd October high. A return over 1.5000 will clear the last 3-month pressure and may put key resistance 1.6000 into focus. Initial resistance holds 1.4363 last week high. On the downside, 1.3313, Tuesday low, hold supports. Further support holds 1.2208 trendline support. Next long-term support holds 1.1640 November 2005 low and therefore 1.0739 September 2003 low.
GbpUsd Market reversed most of Cable gains from mid-December and traded around 1.5000. On the downside, strong supports hold 1.4471 December low ahead of 1.3682 March 2001 low. Further support holds 1.4354 31st December low. Sentiment remains mixed but renewed strength may open the way to 1.6075 (38.2% retracement of 1.8669 - 1.4471 decline) and even 1.6570 (50% retracement). Uptrend may look for 1.6673 30th October high strong resistance. Further resistance holds 1.7816 (50% retracement of 2.1161-1.4471 decline). Initial resistance hold 1.5724 17th December high.
UsdJpy UsdJpy broke out the 4-month downtrend upper trendline and hit 94.64 high on Tuesday. Initial resistance holds 96.13 (38.2% retracement of 110.67 - 87.14 decline). On the upside, strong resistance holds 100 pivot point, but only a recovery over 103 upper trendline and 105 pivot point will put focus again on 108 and 110.67 15th August high. Strong resistance holds 97.43 24th November high. Strong support holds 87.14 17th December low. Renewed downtrend may open 79.70 April 1995 low.
UsdChf Market traded as low as 1.0373 on 29th December in last months downtrend and recovered up to 1.1279 on Tuesday. Uptrend may open the way through 1.1282 former support and possible trend up to 1.2298, 21st November high. Over it, 1.2463 holds strong resistance ahead of 1.2506 (61.8% retracement of 1.4278 - 0.9639 decline). Renewed weakness may break down 1.0655 (61.8% retracement of 0.9639 - 1.2298 advance) and return toward 1.0500 and 1.0375. Such a move may look for 1.0013 15th July low in front of 0.9637 17th March low.