Forex Coffee

Spain’s impossible financial juggling act

wdetsinyi — Fri, 18 May 2012 14:07:38 +0000

Notwithstanding incredibly perilous financial circumstances, the Rajoy government deserves credit for its determination to attempt to steady the Spanish ship.

Down the elevator shaft for the Aussie

wdetsinyi — Fri, 18 May 2012 12:28:36 +0000

One of the more memorable descriptions often applied to trading the Aussie dollar is that it invariably climbs the stairs but then plummets down the elevator shaft. Certainly the price action witnessed over the past six weeks or so is consistent with this depiction. After last month’s arm-wrestle which saw the AUD reach almost 1.05, the currency has been constantly on the back-foot over the past three weeks, falling through 0.98 to a 5mth low in early London trading before some consolidation and profit-taking by successful shorts ahead of the weekend.

The Greek deposit contagion

wdetsinyi — Thu, 17 May 2012 09:57:30 +0000

As is so often the case, it is usually an accelerated flow of money in a particular direction that forces the hand of policy-makers and elected officials.

Slowing pace of gold demand

wdetsinyi — Thu, 17 May 2012 08:53:26 +0000

The data on Q1 gold demand from the World Gold Council - although a little dated - makes for interesting reading nevertheless, especially in light of the latest price developments. It’s the official sector purchases that are of most interest, given that these tend to be more volatile than the more stable investment and jewellery demand, which is driven primarily by India and China.

Fed on heightened alert re further easing

wdetsinyi — Thu, 17 May 2012 08:31:40 +0000

Notwithstanding the more reassuring recovery signs evident thus far in 2012, asset markets are far too complacent regarding the need for additional monetary accommodation from the Fed in the second half of this year.

Firstly, there is the deepening crisis in the eurozone which is permeating through Asia and dampening demand for US products. The most recent FOMC Minutes for the April 24-25 meeting cited Europe as one of the major risks for the US economic outlook.

Turbulent time for commodities

wdetsinyi — Tue, 15 May 2012 10:20:21 +0000

With the bulk of Europe in recession and China clearly slowing more rapidly than anticipated, it is no surprise to see commodity prices under sustained downward pressure.

The shifting eurozone growth debate

wdetsinyi — Tue, 15 May 2012 09:58:33 +0000

As Europe pushes back against austerity, and the new pro-growth French president Hollande is sworn in, never before has there been such a focus on the growth numbers across Europe. The good news is that there is something for everyone. The optimists (and headline writers) can rejoice at the fact that Germany grew five times faster than expected at 0.5% QoQ (it’s a good job the market was not expecting zero quarterly growth…). We have to wait until next week for the more detailed breakdown of the principle drivers.

Dollar benefits from global financial suffering

wdetsinyi — Mon, 14 May 2012 09:19:16 +0000

May has been very kind to the greenback, with a gain of nearly 2% in the dollar index. Indeed, given the rapid re-intensification of concerns regarding the eurozone and clear signs that China is experiencing a very bumpy landing, it could be argued that the dollar ought to be performing better than it has done. After all, Q1 growth in the eurozone (due to be released tomorrow) is expected to show a decline in comparison to the solid growth registered in the US in the quarter. For dollar bulls, they will be eyeing a sustained break of the mid-January high around 81.50.

Aussie bulls raise the white flag

wdetsinyi — Mon, 14 May 2012 08:06:34 +0000

Against the backdrop of a harsher landing for the Chinese economy and an equally bumpy ride for the local economy, it is not surprising to see the Aussie bulls raising the white flag. According to the CFTC, net longs in the AUD fell by over 27K to 25,104 in the week ended May 8th, the lowest for six months. When the CFTC releases Aussie positions for this latest week, we are likely to see another sharp reverse in net longs, judging by the price action over the period.

China monetary easing becoming more urgent

wdetsinyi — Fri, 11 May 2012 12:37:52 +0000

Increasingly clear is that policy-makers in China will soon sanction a further easing of financial conditions in response to mounting evidence that the economy is struggling. Growth in industrial production fell back to high single digits in YoY terms last month, the weakest performance in three years. Retail sales were softer than expected and home sales fell 16% MoM in April. Earlier in the week the Customs Bureau reported that there was essentially zero growth in imports in the year ended April.