Daily Market Review 22/08/2008

USD correcting vs. Everything

Commodities a lot higher. There might be more downside intraday...

Overnight News Bullets

JN Machine Tool Orders YoY (Jul F) out at -8.9% vs. -8.9% prior.
SZ Trade Balance (Jul) out at 2.37B vs. 2.00B expected.
SZ PPI MoM/YoY (Jul) out at 0.5%/4.9% vs. 0.3%/4.6% expected.
GE PMI Manufacturing (Aug A) out at 49.9 vs. 50.5 expected.
GE PMI Services (Aug A) out at 50.6 vs. 52.1 expected.
SW Unemployment Rate (Jul) out at 5.8% vs. 5.9% expected.
NO GDP sa QoQ (2Q) out at 0.6% vs. 0.4% expected.
NO GDP Mainland QoQ (2Q) out at 1.0% vs. 0.6% expected.
EC PMI Manufacturing (Aug A) out at 47.5 vs. 47.0 expected.
EC PMI Services (Aug A) out at 48.2 vs. 48.0 expected.
EC PMI Composite (Aug A) out at 48.0 vs. 47.7 expected.
UK Retail Sales MoM/YoY (Jul) out at 0.8%/2.1% vs. -0.2%/1.8% expected.
UK Total Business Investment QoQ/YoY (2Q P) out at 1.9%/-1.9% vs. 3.1%/-0.7% expected.
SZ ZEW Survey Expectations (Aug) out at -79.6 vs. -76.9 prior.
CA CPI MoM/YoY (Jul) out at 0.3%/3.4% vs. 0.4%/3.4% expected.
CA Core MoM/YoY (Jul) out at 0.1%/1.5% vs. 0.2%/1.6% expected.
US Initial/Continuing Jobless Claims out at 432K/3362K vs. 440K/3405K expected.
US Philly Fed (Aug) out at -12.7 vs. -12.6 expected.
US Leading Indicators (Jul) out at -0.7% vs. -0.2% expected.
US EIA Natural Gas Storage Change out at 88 vs. 84 expected.
JN Supermarket Sales YoY (Jul) out at 0.9% vs. -0.9% prior.

Markets

FX: USD dropping heavily vs. all currencies and commodities.
Fixed Income: Bearish price action in most 10-year contracts. STIR Futures: 10% chance of a 25 bps. rate hike at the 16th of September FOMC Meeting.
Stocks: Rather negative European session, down more than 1%. US mixed, but back from an intraday sell-off.
Commodities: Massively higher across the board. Crude now trading above $121/bbl.

O/N Data Heat map:

EU	US	JP	UK	SZ	AU	CA	NZ	NO	SE	GE
+	-	+	+	+		-		+	+	-

Calendar

Today's Highlights:

Time (GMT) Region Release Consensus
08:00 EC ECB Euro-Zone Current Account
08:30 UK GDP (Q2) 1.5%/0.1%
08:30 UK Private Consumption (Q2) 0.5%
08:30 UK Government Spending (Q2) 0.5%
08:30 UK Gross Fixed Capital Formation (Q2) -1.2%
08:30 UK Imports and Exports (2Q P)
09:00 EC Industrial New Orders (June) -1.1%/-6.3%
14:00 US Fed’s Bernanke speaks on financial stability at Jackson

What's going on?

Despite gains earlier this week, Asian stocks are set to close the week lower, dragging the regional benchmark index to lowest levels since mid 2006. Spreading credit losses amongst the financial companies are seen as the primary driver for equity losses as well as the high oil prices that have been bid back up over $121.
Helped by sudden rush in oil prices and USD once again on the offer, commodities are set for a the largest weekly gain in 33 years as measured by the popular CRB commodities index.
Despite the weak Asian equity performance, Japanese yen remains on the offer and yen funded carry trades strong in formation as Japanese investors are seen continually flocking to higher yielding foreign investments.

USDTRY to resume the downtrend...

FX Trading Strategies

Pair	Supp.	Resis.	Comments
USDTRY	1.1850	1.1904	While pair has been bid strongly back up after touching the 1.15 mark the greater downtrend is intact and 1.1985 has capped advances on the upside. We are looking for a retracement back towards the 1.18 mark and have placed an order to sell at 1.1880 offered. Stop loss 1.1901 bid.

Risk warning
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