METRO FINANCE

Asia Sidelined As Its Waits For Europe To Provide Movement

noreply@blogger.com (Ahmad Rodhi) — Sun, 9 Mar 2008 23:17:00 -0700

European Morning Update

Releases from Japan:

	Forecast	Actual
Japan - January	1.5430-72	1.0255-83
Machine Orders (MoM)	+2.6%	19.6%
Machine Orders (YoY)	- 4.5%	11.4%
Japan - February
Money Supply M2+CD (YoY)	+2.1%	+2.3%
Broad Liquidity (YoY)	+3.5%	+3.5%
Eco Watcher's Survey: Current	31.8 (prior)	33.6
Eco Watcher's Survey: Outlook	35.8 (prior)	39.5

Japan's machinery orders surged over January by a whopping 19.6% MoM and +11.4% YoY to swamp forecasts of a mere +2.6% and - 4.5% respectively. It is a very volatile series but the sheer size of the bounce is quite marked as the figure is often used as a leading indicator of corporate capital investment, which accounts for about 15% of Japan's gross domestic product. It will certainly raise some hopes that Q1 will still manage to provide a positive GDP. ....more

Dollar Finds Temporary Boost From Modest Housing Data

noreply@blogger.com (Ahmad Rodhi) — Mon, 25 Feb 2008 18:20:00 -0800

Daily Forex Fundamentals | Written by DailyFX | Feb 26 08 02:12 GMT |

A drop in housing sales boosted the US dollar temporarily in the Tuesday morning session with the report's details revealing a far more impressive reading than the headline print would suggest. However, before the US data was in play there were a number of other international reports moving the majors. The yen was loosing ground against the greenback in the morning hours as the government's economic outlook was downgraded for the first time in 15 minutes thanks to the cooling in US demand. Elsewhere, the pound regained ground after a BBA reading reported the first rebound in mortgage filings in months and in doing so diverging with the US's housing market slump. The euro remained range bound against its American counterpart as the market overlooked comments from officials to look ahead to Tuesday's data spread. Finally, rising commodity prices revived demand for the New Zealand, Australian, and Canadian dollars; with the New Zealand dollar notably scaling a 22-year high against the battered greenback.

From the US's own docket, the National Association of Realtors' Existing Home sales indicator reported the sixth consecutive monthly decline in sales, adding pressure to the market's growing fears of an impending recession. According to the group's statistics, sales fell 0.4 percent; though the annual pace of sales actually held unchanged at 4.89M units. In fact, the monthly change was actually the product of an upward revision to December's sales numbers, suggesting the housing recession may be finding a temporary bottom. What's more, the median home price fell to $201,100 from $210,900, suggesting demand may be responding to attractive pricing in the market. On the other hand, this data will not likely be taken as means for the Fed to abandon its rate cuts just yet. As other major sectors around the US begin to falter (like employment, the financial market and business investment), the central bank now has more than just the housing market to contend with when making its monetary policy decision.

The securities market picked up today as Standard & Poor's announced that they will continue to honor MBIA and Ambac's AAA rating, and spurred investor's willingness to take on increased risk. The DJIA rose an impressive 189.20 points to reach 12,570.22, with Acola and IBM leading the advancers, while Citigroup came out as the only loser of the Blue Chips. Among the broader indices, the S&P 500 picked up 18.69 points to leave the index standing at 1,371.80 points, led by Getty Images and Synthetic Fixed-income Securities Inc., while Cott Corp and Omnova Solutions posted the biggest decline.

US Treasury prices tumbled today as spirits were lifted after the statement by S&P, and led many investors to step away from the safe haven of risk free bonds. The 10-Year yield rose to 3.89 percent, while the 2-Year yield surged to 2.11 percent. We expect to see an overall increase in volatility as tomorrow is filled with eventful releases like the German GDP and Business Climate index due out during the early morning, followed by the US Producer Price and the S&P/Case-Shiller Home Price index later in the afternoon.

Mid-Day Report: Dollar Soft after Disappointing Philly Fed Survey

noreply@blogger.com (Ahmad Rodhi) — Fri, 22 Feb 2008 00:55:00 -0800

Dollar dives against the Japanese yen and remains soft across the board in US session after the release of much worse than expected Philly Fed index. The index dropped another month from -20.9 to -24.0 in Feb, lowest since 2001, versus consensus of a rebound to -10.5, suggesting that manufacturing activity continued to contract further. The data is supportive to further easing from Fed in near term. Other data saw Leading Indicators dropped -0.1% in Jan. Jobless claims dropped 9k from upwardly revised 358k to 349k.

Sterling rebounded strongly earlier today after much stronger than expected retail sales report and remains firm across the board. Retail sales in UK rose 0.8% mom, 5.6% yoy in Jan, much stronger than expectation of 0.1% mom, 4.6% yoy. Traders scaled back some bets for a near term rate cut considering the increasing inflationary pressure. Though, the easing cycle is not expected to end soon yet.

Swiss Franc, on the other hand, remains steady in range. trade surplus climbed from 0.18b to 1.215n in Jan, beating expectation of 0.8b. Combined PPI surprised the markets by rising 0.5% mom, 3.7% yoy in Jan, beating expectation of -0.1% mom, 3.0% yoy.

Shares fall on more economy fears

noreply@blogger.com (Ahmad Rodhi) — Mon, 28 Jan 2008 04:51:00 -0800

All eyes are on the US again

European and Asian shares have fallen sharply as concerns remain about the threat of recession in the US and its impact on the world economy.

The UK's main FTSE 100 index was down 114 points, or 1.9% by noon trading in London, while Germany's Dax had lost 1.9% and France's Cac had slid 2%.

In Japan, the Nikkei 225 had earlier finished the day's trading down 4%.

Analysts said investors were cautious ahead of an expected interest rate cut from the Federal Reserve on Wednesday.

Hong Kong's Hang Seng index closed down 4.3%, while Mumbai's Sensex finished 1.1% lower.

Monday's falls came after falls on Wall Street on Friday, with the Dow Jones index ending down 171 points, or 1.4%, at 12,207.2.

'No appetite'

Despite the falls, the market mood seemed calmer after last week's ups and downs.

The market appears to have hit bottom last week but it's still not in a position to keep rising, considering various events pending such as the Fed rate decision

Koichi Ogawa, Daiwa SB Investments

The week had begun with sharp stock market falls on growing worries over the US economy, only for them to recover later in the week by a $150bn (£76bn) stimulus plan agreed between the US Congress and the Bush administration.

Francis Lun, general manager at Fulbright Securities in Hong Kong, said the market was "fluctuating wildly".

"Investors don't have the appetite to buy stocks now," he was quoted as saying by the AFP news agency.

"The market appears to have hit bottom last week but it's still not in a position to keep rising, considering various events pending such as the Fed rate decision," said Koichi Ogawa, chief portfolio manager at Daiwa SB Investments in Tokyo.

Uncertainty

Many analysts are expecting the Federal Reserve, the US's central bank, to cut interest rates again when it makes its next scheduled decision on Wednesday.

Last week it reduced rates to 3.5% from 4.25% in an emergency move.

Analysts are also waiting for any further economic details in President Bush's State of the Union address late on Monday.

"There's a lot of uncertainty out there: uncertainty over the US economy, uncertainty over China's economy," said Rob Hart, an analyst with Morgan Stanley in Hong Kong.

"People are also worried about contagion in Europe," he added.

"If the US slows down, will it trigger a slowdown in Europe?"

BBC News

Citigroup Support The Dollar

noreply@blogger.com (Ahmad Rodhi) — Tue, 27 Nov 2007 23:03:00 -0800

U.S dollar took back the losses and straightened against the major currencies after yesterday news that Citigroup Inc. would sell a $7.5 billion stake to the Abu Dhabi government triggered a wave of buying from traders that rely on computer models. That news restored confidence in battered U.S. banks, fueling a steep rally in the stock market.

The euro fell 0.3 percent to $1.4832, more than a cent below last week's record highs at $1.4966. The euro zone common currency traded in a seesaw fashion after a strong reading of Germany's Ifo corporate sentiment survey. German Finance Minister Peer Steinbrueck said on Tuesday he expected the economic upturn in the euro zone's largest economy to continue in 2008 despite the strong euro.

The dollar rose sharply against the yen in the Tokyo session after the Citi report, sparking the unwinding of short positions on the greenback, and that rally spilled over to other currencies, traders said.

Investors interpreted Citi's move as a sign financial institutions were repairing the damage from a meltdown in the U.S. sub prime mortgage market and the resulting credit crunch, which has been a big factor behind recent dollar weakness.

The dollar pulled away from a 2-1/2-year low against the yen touched on Monday to trade at 109.15, on track for its biggest one day gain since late August. The yen fell broadly as news of the Citi stake sale prompted a recovery in the Nikkei share index, warming demand for relatively riskier assets. However, it is too early to think that the dollar recovers and change direction up.

Today, Investors will be focused on the Core Durable Goods Orders m/m data that will be released at 13:30 GMT and Existing Home Sales at 15:00 GMT.

---Read More---

Weekly Technical Strategist

noreply@blogger.com (Ahmad Rodhi) — Sun, 25 Nov 2007 16:22:00 -0800

EURUSD: Prints Higher Prices But Tumbles To Close Lower
GBPUSD: Continues To Look For Direction
USDJPY: Sees Downside Momentum, Touches The 107.55 Low.

EURUSD

While EUR's rally off the 1.4520 low turned it above the 1.4724/51 zone, its Nov 09 & 14'07 highs early in the week after a lot of hesitation, it rose further on Friday testing a high of 1.4967 on intra day basis before ending the session at 1.4838.It however maintained a higher weekly close. The inability of the pair to hold on to the said gains with the subsequent collapse forming a long-legged doji like candle pattern (daily chart) may have signaled that a fresh corrective pullback/consolidation could be building up. In such a case, EUR should see downside weakness initially towards the 1.4724/51 area, its Nov 09 & 14'07 h

ighs followed by the 1.4602/81 area, which marks its .382 Ret (1.4015-1.4967 rally).Further downside pressure will target the 1.4535/20 level, its Mar'1995 high/Nov 12'07 high ahead of 1.4375/42 zone, its .618 Ret/ Oct 22'07 high.Additionally,while overbought conditions continue to persist on the daily and weekly time frames, nearer term downside weakness remains at risk. On the upside, reversing Friday losses and returning back above the 1.4918 level, its 1.618 Fib Ext (monthly chart) will pave the way for a retest of its YTD high at 1.4967 and ultimately its big psycho level at 1.5000.Beyond here will open

the door for higher prices towards the 1.5100 level, representing its psycho level. On the whole, EUR has tested higher prices and triggered its medium term uptrend but now requires a push above its Friday high at 1.4967 to pressure the 1.5000 level and beyond.

Directional Bias:

Nearer Term -Mixed
Short Term -Bullish
Medium Term -Bullish

Performance in %:

Past Week: +1.19%
Past Month: +1.39%
Past Quarter: +5.40%
Year-To-Date: +12.43%

Weekly Range:

High -1.4967
Low -1.4621

The Fed Clarifies Its Stance On Growth & Inflation

noreply@blogger.com (Ahmad Rodhi) — Fri, 23 Nov 2007 00:57:00 -0800

The minutes from the October 30/31 Federal Open Market Committee released meeting this afternoon show that the decision to cut the federal funds rate a quarter percentage point to 4.50 percent was, as we suspected, a close call. The Fed's analysis of current economic conditions showed a great deal of concern about the potential negative spillover from the ongoing housing correction to other parts of the economy. The Fed noted, however, that "there was scant evidence" of such a spillover so far.

Our interpretation of the Fed's rate cut on October 31 was that this was the last rate cut the Fed would make in anticipation of slower growth. The Fed may very well cut rates again but they will need to see some actual evidence that the ongoing contraction in the housing sector is spreading to other areas of the economy. In the three weeks since the October 31 meeting, there has been very little economic news that would support that case. Nonfarm employment came in well above expectations and retail sales also held up relatively well. About the only soft spots were a 0.5 percent drop in industrial production and a slight rise in weekly first-time unemployment claims.

The 9 Week Trading Anomaly in USD/CAD

noreply@blogger.com (Ahmad Rodhi) — Sat, 10 Nov 2007 01:57:00 -0800

Since 1973, there have been 4 instances when the USDCAD has declined for 9 consecutive weeks; one of these instances is now. In the previous 3 instances, the pair has registered multi-month lows. Additional evidence calls for a low of significant proportion. The Elliott wave pattern identifies low risk entry points and targets.

The red dots indicate when the USDCAD had declined for 9 consecutive weeks. This phenomenon has occurred on 4 separate instances going back to 1973 (one instance was twice a row….10 weeks down) and each time at least a short term low is put in place. The green line is the difference between speculative and commercial positioning. USDCAD bottoms occur when this indicator is at its peaks (when specs are very long and commercials very short CAD). The indicator is at its highest level ever now.

From an EW perspective, we can count the decline from 1.0866 as the top of a 2nd wave (or B wave). Wave 3 (or C) has been underway since 1.0866. In percentage terms, the decline from 1.0866 would equal 1.618 X (the decline from 1.1875-1.0340). This is a common relationship that is found between the lengths of waves 1 and 3. Either a 4th wave is underway or a more bullish pattern is unfolding from .9055. Either way, this rally should reach the previous congestion area near .9700. The 38.2% of 1.0866-.9055 is at .9750 as well.

The 15 minute chart shows the constructive pattern. The initial rally from .9055 to .9404 was either wave A or 1 in a 3 wave corrective series or 5 wave impulse. The clear 3 wave decline that followed was either wave 2 or B. Wave C or 3 is now underway towards the .9700 level. Objectives are the 100% extension of .9055-.9404/.9236 at .9584 and the 161.8% at .9799. Even shorter term, wave 1 of C (or 3) is already complete and a small setback should end near .9360/70 (maybe lower but price needs to remain above .9251 in order to keep the bullish bias intact) before the next bull leg.

Read more....................

Major Market Movers: Thee Decision

noreply@blogger.com (Ahmad Rodhi) — Wed, 31 Oct 2007 22:55:00 -0700

The Final round is over and the K.O was that made by the Federal Open Market Committee as they announced lowering their benchmark interest rates by a quarter basis points taking them down inline with market estimates to 4.50 percent; while another match was seen on the discount rate taken down to 5.00 percent.

The decision was already priced in and expectations were to a definite cut on key rates by the feds but remains the statement's rhetoric was the focal concern. We did not sense that massive upbeat change in the statement that accompanied the decision and that was rather a disappointment, as still the fed says that the risk correlated to inflationary pressures still remain yet have moderated, with these historic low levels we are seeing the greenback and who can say they have no right!

Harga minyak tembus $90

noreply@blogger.com (Ahmad Rodhi) — Fri, 26 Oct 2007 04:00:00 -0700


	Situasi hubungan Turki-Kurdi memunculkan ketidakpastian

Harga minyak untuk kali pertama menembus 90 dollar per barel akibat kurs dollar yang rendah dan kekhawatiran soal ketegangan di Turki timur.

Minyak jenis US light crude melonjak ke posisi 90,2 dollar per barel di sesi perdagangan Kamis di New York, sebelum kembali ke 89,39 dollar pada awal perdagangan hari Jumat di Eropa.

Watch What the Fed Watches - How Much Will the Fed Cut?

noreply@blogger.com (Ahmad Rodhi) — Wed, 24 Oct 2007 17:49:00 -0700

The Federal Reserve could cut interest rates by 25 bps to rescue the U.S. credit market. But will it be enough?

The spread between risk-free treasuries and junk bonds remains above 425 basis points on higher risk aversion
Shares in consumer spending, housing, and lending sectors continue to underperform the overall market

G7 Statement Increases Pressure on China

noreply@blogger.com (Ahmad Rodhi) — Mon, 22 Oct 2007 01:37:00 -0700

As expected, at this weekend's G7 meeting in Washington, the finance ministers and central bank governors increased pressure on China to let CNY appreciate faster. The wording on China was the only major change in the foreign exchange statement compared to the last G7 meeting in April 2007.

19 October G7 statement

"We welcome China's decision to increase the flexibility of its currency, but in view of its rising current account surplus and domestic inflation, we stress its need to allow an accelerated appreciation of its effective exchange rate."

Dollar Lower after FOMC Minutes

noreply@blogger.com (Ahmad Rodhi) — Tue, 9 Oct 2007 22:15:00 -0700

Action Insight | Written by ActionForex.com | Oct 09 07 19:18 GMT |

Dollar feels some pressure against most majors since mid US session and extends weakness right after the release of FOMC minutes. The minutes revealed that the policy members made a unanimous decision on Sep 18 to cut federal funds rate by 50bps to 4.75%. There are not specific plan for further rate cuts and "further actions would depend on how economic prospects were affected by evolving market developments and by other factors".

The minutes noted that "outlook for economic activity as characterized by particularly high uncertainty, with the risk to growth skewed to the downside." Members are concerned with the impact of the financial market turmoil on aggregate demand and a more general tightening in credit. They believed loosening monetary policy was an appropriate response to the tightening in credit. The minutes noted that housing markets remained "exceptionally" weak. "Moderate" growth is seen in the beginning of Q3 even though business investment remained strong. While inflation slowed, "inflation risks could be heightened if the dollar were to continue to depreciate significantly." Also, "labor markets across the country generally remained fairly tight".

...........Read more ActionForex.com

USA: A Labour Market Revival

noreply@blogger.com (Ahmad Rodhi) — Fri, 5 Oct 2007 15:23:00 -0700

Overview:

Following the very weak August reading the labour market had something of a revival with the September employment market report showing 110K new employees in September and a net revision of 118K for the prior months. In general today's report calms the fears that the US labour market was about to see a severe slowing.

...Datails : read more...

ECB & BOE Rate Decision Leave The Market Flat

noreply@blogger.com (Ahmad Rodhi) — Thu, 4 Oct 2007 21:12:00 -0700

Asian Morning Update

Unchanged policies from the Bank of England and European Central Bank were no surprise. However, there is a slight difference in the reaction to each decision. The market clearly has the bit between the teeth looking for a cut before the end of the year from the BOE, while the ECB still has a slightly hawkish bias.

The decision by the BOE was not entirely welcomed by the manufacturing and retail industries, although that can hardly be taken as surprising either. However, the sentiment that is now pervading the market is one of a high risk of a strong slowdown in the U.K. and while inflation remains towards the high end of the CB's target band this would be a negative scenario for the Pound. However, for now there is likely to be muted reaction as the greater sentiment is still Dollar bearish but the Pound may struggle to take full advantage of this. Yesterday's minutes are due on October 17th, nicely before the G7 meeting.

.....Read More actionforex.....

Four Big Investor Errors

noreply@blogger.com (Unknown) — Wed, 3 Oct 2007 16:29:00 -0700

By Anne Marie Teague

The only thing harder than buying a stock is deciding when to sell. Whether you consider yourself a long-term investor or not, it is always good practice to keep Warren Buffett's mantra in mind :

"Rule No.1 is: Don't Lose Money.
Rule No.2 is: Don't Forget Rule No. 1."

Whether you need to cut your losses or take a profit, read on for some simple tips you can use to help you decide whether to sell. Read all of this great tips....

Market Updates

noreply@blogger.com (Ahmad Rodhi) — Tue, 2 Oct 2007 17:27:00 -0700

Today’s New York session saw USD shorts licking their wounds after overnight buying in Asia and London sent the USD firmly higher. However, sellers were waiting in the shadows and gave some footing around 1.4140-50 level in EUR/USD, keeping the pair in a tight trading range. The USD also topped out today against the JPY around 116.00 as this level has provided good selling resistance.

Is this USD rally for real? It’s hard to say as it looks like there are definitely some traders taking profit on short USD positions ahead of all the economic data due out this week. Tonight the RBA (Reserve Bank of Australia) will announce their rate decision and later this week the BoE (Bank of England) and the ECB (European Central Bank) will announce their respective interest rate policies. All of these central banks are widely expected to remain on hold and keep interest rates at current levels. Lastly, on Friday the US Non Farm Employment report is set to be released.
.....Read More....

Major Market Mover: Employment Week...

noreply@blogger.com (Ahmad Rodhi) — Mon, 1 Oct 2007 02:03:00 -0700

Forex Fundamental Analysis Reports | Written by Crown Forex | Oct 01 07 06:27 GMT |

The time has passed and the first week of a new month is now upon us as all market participants await impatiently Friday's jobs fiesta which will foreclose for us how the labor market did in September after the surprise drop in payrolls seem in August that exceeded all pessimist expectations.

.........Read more actionforex.com

MARKET TALK: USD/SGD Has Scope To Fall;Players Watching Stocks

noreply@blogger.com (Ahmad Rodhi) — Tue, 18 Sep 2007 18:09:00 -0700

Contact us in Singapore. 65 64154 140;
MarketTalk@dowjones.com

0105 GMT [Dow Jones] USD/SGD "can still drop" further after 100 pip fall yesterday, with players watching stock market for signs of new capital inflows, says trader. Pair may next test 1.5050, low last touched July 25, with potential to keep sinking if equities stay supported through session. Benchmark STI opens up 3.5% following 2.9% surge in S&P 500 overnight. USD/SGD last 1.5069, down from 1.5166 late in Asia. (JRJ)

0104 GMT [Dow Jones] HSI may rise 600-700 points, tracking gains in regional bourses after Fed cuts rates 50 bps, which more than expected, says ICEA's Ernie Hon; "the overhang of a U.S. rate cut has been settled to ease credit concerns,I think local trading sentiment will get a boost with banks here likely to follow with a 25 basis point rate cut." Property names may rise 4-5% to leadgains as HK banks expected to follow Fed move. PCCW (0008.HK) may not react much to unexpected news that chairman of Smart Rich (1051.HK) would like to make a bid, as PCCW says it has not been contacted, bid unlikely to materialize; CCB (0939.HK) may rise as price set at top end of range at CNY6.45 for A-share IPO. Index down 0.1% at 24576.85 yesterday.(SUT)

0103 GMT [Dow Jones] Impact of Fed's cut in interest rates last night may lead to rise in China shares today as more hot money will likely flow into country in anticipation of CNY gains. Shanghai Composite +0.1% at 5425.21 yesterday in 5th straight session of gains; resistance tipped at 5600. Shenzhen Index fell 0.2% to 1508.82 yesterday. "There will even be more money sloshing in China after the Fed slash," says Wang Junqing, analyst at Guosen Securities. Upcoming IPOs not expected to curb bullish sentiment, because CNY2.26 trillion in funds gathered by China Construction Bank (601939.SH) during subscription to its A-shares didn't stop markets from rising yesterday. Wang expects steel shares to rise more, cites relatively low valuations. Shanghai Stock Exchange says it may "take emergency measures" today if Typhoon Wipha, strongest to strike city in decade, affects trading or communication system. (NYW)0102 GMT [Dow Jones] Indonesia's domestic bond market likely to rally after Fed's 50bp rate cut overnight. "The Fed rate cut will create more room for Bank Indonesia to cut rates," bond analyst says. Note, Bank Indonesia Governor Abdullah says earlier in week that bank won't automatically follow a Fed rate cut as must also consider domestic inflation.

(IMS)0100 GMT [Nikkei/Dow Jones] December Nikkei 225 futures extend gains and briefly top overnight Chicago close of 16300 due to short-covering. But contract facing some profit-taking above 16300, traders say. Lead contract up 3.2% at 16290 after hitting 16310. (JUO)

0100 GMT [Dow Jones] Short-term U.S. Treasurys in Tokyo hold gains from NY overnight. Fed's 50bp cut may suggest that it's unwilling to cut rates again, so 2-year Treasury yield may move back up to 4.25%-4.35% by next non-farm payrolls result due Oct. 5, says foreign brokerage trader. Adds Fed unlikely to make additional rate cuts unless non-farm payrolls come out in negative territoryagain next month. 2-year note last flat at 100 1/32 to yield 3.978%, 10-year also unchanged at 102 1/32 yielding 4.491%.

(MEF)0057 GMT [Dow Jones] Lead December 10-year JGB futures lower but haven't taken a big hit despite gains in Tokyo shares; "market players aren't rushing to sell bonds ahead of BOJ Governor Fukui's presser" at 0630 GMT, says Daiwa Securities SMBC senior market economist Mari Iwashita. Notes many in market expecting more Fed rate cuts, which should support JGBs. December futures down 0.31 at 135.87, with Nikkei up more than 500 points; 10-year yield +4.5 bps at 1.570%.(HIN)

0056 GMT [Dow Jones] HK banks may not immediately follow in lockstep Fed's 50bp cut in main policy lever, but likely to catch up when liquidity pressure in local market eases after spate of IPOs. "It's up to the commercial banks to decide whether to cut their prime lending rate, but Hong Kong interbank rates were seen higher largely due to the liquidity squeeze from subscriptions to IPOs, which is likely a temporary condition," says HKMA chief executive Yam earlier today. Adds 50bp rate reduction by Fed "more than expected", but unlikely beginning of downward trend.(JYC)

0053 GMT [Dow Jones] Singapore government bonds likely to rise following Fed's 50bp cut, with yield curve expected steeper as 2-to-10-year U.S. Treasury spread widened 9 bps overnight. However, OCBC strategist Selena Ling says SGS curve "has already been steepening" in recent sessions so shift may be more moderate. Adds, SGS 2-year yield expected to drop, but should find "immediate support" at Monday's intraday low of 2.00%. SGS 2-year bid-side yield finished +3 bps at 2.06%, 10-year +3 bps at 2.74%. (JRJ)

0051 GMT [Dow Jones] Korea T-bonds rise slightly after Fed's 50bp rate cut with 3-year yield quoted down 1 bp at 5.35%, 5-year down 1 bp at 5.39%; December futures +3 ticks to 107.11. Still, bonds not reacting much to Fed move as "there is no strong pressure for a rate cut in Korea since recent economic data have still been strong and liquidity is still high," says local securities firm trader. Also, CD rate hovering near 6-year highs, thus medium-, longer-term bonds less attractive. Traders expect 3-year yield in 5.33-5.37% band, 5-year 5.37-5.41%.(PVA)

0049 GMT [Dow Jones] Federal Reserve interest rate cut prompts turnaround in sentiment for base metals, LME copper near 6-week high of $7,702/ton. Gains look solid, copper rally on Fed cuts helped by firm fundamentals that "haven't changed on the past few months," says National Australia Bank analyst Gerard Burg. Copper's current level fundamentally justified by strong China demand, he says. LME 3-month copper last trades at $7,695, up $110 vs PM kerb. (EFB)

0048 GMT [Dow Jones] Australian economic growth appears to be peaking, will keep RBA on sidelines, Westpac says. Westpac-MI leading index of Australian economy +4.6% in July annualized vs 4.9% in June; index growth still above trend but weakening. Credit market conditions still a concern for RBA; says Fed rate cuts will help growth and ease conditions over long-term but RBA likely to remain on hold in meantime. Further restraint could come from rise in retail funding costs as institutions pass on higher borrowing costs. RBA lifted rates 25 bps to 6.5% in August.(SRH)

(END) Dow Jones Newswires

September 18, 2007 21:05 ET (01:05 GMT)

On The Street: Fed Chief Heeds Call For Cut

noreply@blogger.com (Ahmad Rodhi) — Tue, 18 Sep 2007 16:03:00 -0700

   By Dan Burrows and Rob Wherry
  Of SMARTMONEY.COM

In his first big test since replacing Alan Greenspan at the helm of the Federal Reserve nearly 20 months ago, Ben Bernanke blinked. Taking a page out of his predecessor's memoir, the Fed chairman surprised the Street with an aggressive rate cut. Stocks soared as soon as the move was announced Tuesday afternoon.

After three months of dealing with the subprime mortgage mess, a subsequent credit crunch that required injections of billions of dollars into the economy and a jittery stock market that had fallen off as much as 9% from its all-time high earlier this year, investors of every stripe were calling (or, in the case of Jim Cramer, screaming) for Bernanke to lower rates. If he didn't, they warned, there would be dire consequences.

In the end, he didn't disappoint. After holding the target on the federal-funds rate steady at 5.25% for almost 15 months the Federal Open Market Committee, in a unanimous vote, trimmed it by a half percentage point to 4.75%, a level not seen since March 2006 and the first cut in four years. The central bank also lopped a half point off the discount rate that it charges banks for overnight loans. Equities reacted positively to the generous easing: The Dow Jones Industrial Average jumped 336 points to finish at 13,739.

"It's very encouraging that the Fed is doing what they need to do as opposed to doing what they think would look right, meaning that the Fed has to admit a little bit that they were wrong, that they should have cut a little while ago if they're being this aggressive now," says Art Hogan, chief market strategist at Jefferies & Co. "A lot of market participants have been saying that the Fed was behind the curve, but you can get caught up on monetary policy pretty quickly."

Now, investors are left to ponder what it all means. Who benefits from this cut -- and perhaps others that might come later this year? Is a recession on the horizon? In the end, though, we are betting Bernanke still has his work cut out for him. Energy prices remain high. The dollar continues to weaken against other currencies. And many investors think we still have even more bad news to digest from the housing market.

Bernanke "came out swinging," says Kurt Karl, chief market economist for Swiss Re. Karl says going forward he will be keeping a close eye on unemployment figures and signs of business confidence, like spending figures. He thinks the Fed will cut rates one more time by the end of the year. "I think this reduces the risk of a recession." Karl says. We may still have one, he hedges, but it will be "short and shallow."

That means all eyes are now focusing on 2008. "The cut will have no meaningful economic effect until next year," says Keith Hembre, chief economist at First American Funds. "You're looking at consumption growth that was 2% last quarter and will probably be 2% this quarter. I think it becomes weaker than that in the fourth quarter and into the first quarter of next year. Fed cuts can certainly help with that a little bit but I don't see a massive wave of borrowing."

True, Tuesday's cut could bode well for a few sectors like financial services and utilities, but they still carry significant risks, especially as the market's reaction was almost certainly disproportionate to the FOMC news. "Financials are all about to report earnings so that's a dangerous game to play," says Jefferies' Hogan. "They might not be the safest play this week. Historically interest rate cuts are good for financial and utilities, but I don't know that this is the environment to bet it."

No doubt, though, some financials-loving fund managers are happy with the rate moves. Bill Nygren, who manages Oakmark Select, was holding on to a large position in Washington Mutual (WM) that had caused the fund to trail its benchmark by 8.5% year to date. (WaMu closed up 5% Tuesday.) Bill Miller, who runs Legg Mason Value Trust, owns Citigroup (C), J.P. Morgan Chase (JPM), Capital One (COF) and Countrywide Financial (CFC). No doubt all these stocks will get a lift, too.

But alas, the euphoria of Tuesday's cut is likely to be short-lived. Indeed, Countrywide's troubles can't completely be fixed with a rate cut. The market may only be setting itself up for a fall as investors key in on earnings.

"Going forward I think this market will test the low end of the trading range simply because of the fact that we're going to be moving into earnings season," says Peter Cardillo, chief market economist at Avalon Partners. "There's the guessing game of how the subprime situation affected profits, and until we get a clearer picture of that the market probably will trend lower over the next few weeks."

And, of course, we'll all be back on Fed watch soon, fretting about a recession and tracking the news that's perceived as likely moving the Fed's needle: inflation, unemployment, consumer spending and earnings. "The data will be the driver of the market," Hogan says.

If that isn't spooky enough, the timing of the next FOMC meeting is rather inauspicious. It's slated for Halloween.

-For more information and analysis of companies and mutual funds, visit SmartMoney.com at http://www.smartmoney.com/

(END) Dow Jones Newswires

September 18, 2007 18:59 ET (22:59 GMT)

European Market Update

noreply@blogger.com (Ahmad Rodhi) — Thu, 13 Sep 2007 03:36:00 -0700

Forex Fundamental Analysis Reports | Written by Trade The News | Sep 13 07 10:06 GMT |

ECB Monthly Report In Line with Last Month's Report

The European indices are currently trading slightly lower in the session, but are off of their worse levels in a bout of upward momentum. The indices are still trading lower however on fears that the profits will decline as the Euro makes new all time highs against the dollar, and the Dollar makes multi-year lows against the Canadian Dollar.

European government bonds and gilts alike are currently trading lower in the session dropping sharply following ECB comments and poor auction results in the UK. Italy sold €2.5B 5-year 4.00% BTPs with an average yield of 4.12%, and a bid-to-cover of 1.56x. The auction, the fourth for this issue, brings the amount outstanding for this issue to €14.5B. Note that the average bid-to-cover over the past three auction s was 1.51x. Over in the UK the DMO sold £2.25B in 5.25% 2012 bonds with an average yield of 4.989%, and a bid-to-cover of 1.98x. This auction, the third for this issue, brings the amount outstanding on the issue up to £7.75B. The bid-to-cover compares to the 1.46x seen at the last auction. Note that today's auction had a 1.2 bps yield tail, and a 5 tick price tail.

Sterling Trade Data Reaction Will Be Important

noreply@blogger.com (Ahmad Rodhi) — Mon, 10 Sep 2007 22:51:00 -0700

Forex Fundamental Analysis Reports | Written by Investica | Sep 11 07 04:29 GMT |

The UK trade data remains prone to erratic shifts on a month-by-month basis, although the underlying trend has been for a slight improvement over the past 2-3 months while volatility has been lower. (see attached chart)

The trade data will be watched closely as it will provide important insight into key areas for Sterling. The export data will be important as recent survey evidence has suggested that exports are holding firm. Significant weakness in the export data would increase fears over a deterioration in competitiveness and counter the survey evidence. Import data will also be important as a weak figure would suggest that consumer demand is slowing.

Today's Market Update

noreply@blogger.com (Ahmad Rodhi) — Mon, 10 Sep 2007 04:19:00 -0700

Published: September 10, 2007 6:16 AM

The first London session following Friday’s employment number began with most pairs still consolidating after their opening moves in Asia. The high yielding JPY crosses managed to rebound somewhat, following a routing of Asian equities in the previous session. As the global equity picture began to turn around, EURJPY caught a bid from session lows around the 155.80s mark, and enjoyed a 50+ pip rally to session highs during the European open. USD/JPY was also dealing higher from its days lows. After trading down into the 112.60s in Asia, USDJPY grinded higher by 70+ pips to the 113.30 neighborhood where it meet some fierce offers on several attempts to take out the level. EURUSD meet short term resistance of its own at the 1.3800 level.

As the European morning drew to a conclusion, equities began to turn positive. This helped to propel USDJPY and the crosses to their day’s highs. USDJPY popped 80+ pips from it session lows in a push to penetrate the 114.00 handle. After meeting offers in the 113.80s, the pair managed to find some buyers in the 113.70s area. EURJPY broke back through and shot more than 100+ pips to the upside to test 157.00. EURUSD finally took out offers around 1.3800 to surpass Friday’s New York highs. Sterling also found strength against the greenback. A late session buying surge brought the pair off its 2.0260s lows, up 60+ pips to poke through 2.0300 and deal into the 2.0310s.

In the upcoming New York session, Forex traders will be looking to the U.S. trade balance which is scheduled to be released in the New York morning. Following a week that saw USD negative , release after release, any positive news about the U.S. economy potentially may cause significant greenback strength.

Euro in Range, Sterling Retreats after Central Banks on Hold

noreply@blogger.com (Ahmad Rodhi) — Sun, 9 Sep 2007 22:27:00 -0700

Euro stays in tight range while Sterling retreats mildly term ECB and BoE left rates unchanged. ECB kept rates unchanged at 4.00% today. In the following press conference, Trichet said that even though policy stance is still on the "accommodative side" and inflation risks remains on the upside in the medium term, more information is needed before the next policy move. Also Trichet said that it's too early to draw conclusion from the current correction in risk reassessment. No "vigilance" was used by Trichet this time which suggests that ECB will be on hold for a while, at least, till Oct. One thing to note is that Trichet emphasized a few times that ECB has to ensure that money markets function properly whatever the interest rate is and that this is completely separate topic to maintaining price stability. Also, ECB announced a new long-term refinancing operation as a supplementary operation will be conducted, the details of which will be available right after the press conference.
........Read more......

Stocks rally on reassuring words from Bernanke, Bush

noreply@blogger.com (Ahmad Rodhi) — Tue, 4 Sep 2007 01:49:00 -0700

By Tim Paradis, Associated Press

NEW YORK — Wall Street closed out another erratic week with a big gain Friday after investors took comments from President Bush and Federal Reserve Chairman Ben Bernanke as reassuring signs Wall Street won't be left to deal with problems in the mortgage and credit markets on its own.

Investors balked early in Friday's session when comments from Bernanke didn't indicate a cut in the benchmark federal funds rate was imminent. However, they moved past some of their initial disappointment and appeared to concentrate on comments that the Fed would step in if needed.

Bernanke, speaking at the Fed's annual conference in Jackson Hole, Wyo., said the central bank will "act as needed" to prevent the credit crisis from hurting the national economy.

The major indexes fluctuated but by midday extended their gains after President Bush spoke about details of a plan to help borrowers facing trouble paying their mortgages.

"You've got all the speeches working for the market here," said Michael Church, portfolio manager at Church Capital Management in Philadelphia. "What we've seen in the last few weeks is that Ben Bernanke and the Federal Reserve are paying attention to what's going on. They will help correct the credit markets. For now, we're in a trading range and we have to sort through this mess."