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Thursday, November 30, 2006

Silver Goes Boom!

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As we mentioned earlier, and made a weekly call, to Buy Silver at 13.39 levels,
We are soon meeting for 14.50 levels. After clearing the Resistance at 13.86 the channels are open and target remains same.
Best luck for all the Longs.

Gold Update

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As mentioned earlier, we will be eyeing for 650 zone.
However we saw a slight consolidation after reversing at around 649 levels..
Which is Wonderful..Enjoy the Next months treat :)
We shall see Slight Consolidation, however, with further USD weakness.
And our EUR/USD is approaching the target as we mentioned earlier 1.35 zone.

Data Out : Signs for Dollar weakness

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Data Out indication for Further Dollar weakness to come
It appears Gold to shot off around 650 levels, with Crude Oil strength and weakness in Dollar.
However Clearness of the Main Resistance opens the channels
EUR/USD pushes higher to 1.3215 levels.

Initial Jobless Claims out at 357K VS 315K expected
Continuing Claims out at 2480K vs 2440K expected
Personal Income out at 0.4% vs 0.5%
Personal Spending out at 0.2% vs 0.1% expected
PCE Deflator out at 1.5% vs 1.4% expected

Gold Clears the resistance

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Gold does it Again :)
As mentioned earlier we will cross 642, and we were happy how it was reacting yesterday, it was just in consolidating tone.
Watch out for Economic Data to come out shortly.

Gold Update

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It Appears Gold has chances to break 642 levels today, Main Event today is to see reaction of USD after the release of US Economic Data.
With Technical Indication, we see a nice rally building upwards.
We are seeing Crude Oil pushing upwards nicely, its helping the Precious Metals to rally with it. Main focus remains at the Important datas.

Crude Oil: Tide is finally turning?

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Crude Oil Broke a Solid Resistance at 61.50 acting now as support.
Tide could be finally turning for Crude and target could be set towards 65.75/
Support at 62.10 and resistance at 63.20 area

Watch for US Data today

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The US dollar gave up some of yesterday's gains overnight in Asia, trading in a 1.3142-1.3180 range against the EUR and 116.04-116.56 range against the JPY. The dollar initially benefited from steady profit taking on short positions, and from a moderate uptick in US yields. Right before the Europe open, however, BoJ's board member Noda noted at press interview that expectations of a year-end hike were rising, even if core CPI stays at current low levels.

We continue to highlight the risk on carry trades continues to weigh on the dollar and the market should closely monitor BoJ comments before their December board meeting, as governor Fukui has already pledged to condition the market in advance. Currently the carry trade environment has remained stable, with AUDJPY and NZDJPY recovering from Asia session lows made in the wake of strong Japan IP data.

US data yesterday was mixed; while Q3 GDP was revised up to a 2.2% annualized rate from 1.6% originally reported (a good deal better than the +1.8% consensus), the core PCE price deflator included in the report was revised slightly lower and new home sales were reported down sharply for October.

Still, with Tuesday's Fed commentary having continued to put a heavy emphasis on inflation risk and the Wall Street Journal's Greg Ip noting in Wednesday's paper that Bernanke's Tuesday speech makes rate cuts unlikely "in the months to come", US yields remained better supported throughout most of the session.

Equity markets also staged a rally, with the S&P 500 continuing to retrace Monday's sell off despite a rebound in NYMEX crude prices through $62.

With the USD having been pushed lower by spec selling in recent sessions, longer term accounts continue to look for a fundamental trigger before joining the move, either in the form of elevated expectations for Fed easing or deterioration in the broader environment for carry trades.

We continue to expect softening US data to boost Fed easing expectations further in the weeks ahead and look for the environment for carry trades to weaken as exchange rate volatility rises and risk appetite normalizes.

Ahead today, the US data calendar remains heavy, with weekly jobless claims, October personal income/spending, the OFHEO house price indicator for Q3, and the Chicago PMI all released. We expect claims to moderate back to 315k after last week's surprise jump up to 321k, but the USD would be particularly sensitive to a weaker number here. Meanwhile, we project that Chicago PMI will be stable after last month's big decline, while the core PCE deflator embedded in the personal spending report should remain benign with a +0.2% m/m rise. The OFHEO measure is likely to show house prices continuing to rise in Q3, albeit at a slowing rate, though our economists note this report likely understates the extent of decline in house prices.

Wednesday, November 29, 2006

Natural Gas Update

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Despite the warm weather seen recently in the north-eastern U.S., natural gas prices are following crude oil prices higher on supply concerns.
NYMEX January natural gas futures are closing near $8.865/mmBtu, compared to Tuesday's settlement at $8.559.
Current price action is bringing the February 2006 high at $9.82 back into focus from both a medium and long term perspective.
A daily close above $8.61 would pierce a triple top and affirm an inverted head and shoulders pattern which would favor further gains toward initial $9.48/$9.82

Fed Beige Book out

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Fed beige book prepared for Dec 12 FOMC is as expected. It says, "Most Fed Dists. reported continued moderate growth" - exceptions were NY & Richmond (better), Dallas (deceleration) and Alanta (mixed).

Also, holiday sales outlook is "cautiously optimistic".

Wage growth was moderate (pressures were in NE and San Fran) and prices moderated for energy and bldg materials.

Despite housing and auto weakness, consumer spending increased and labor mkts remain tight.

Mfg was generally positive & bank lending mixed.

Data was gathered prior to Nov 20 and the book was compiled by Atlanta Fed which currently has no President (Mr Poole of St Louis votes instead).

What Old Beige Book Said

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For comparison, here is what the OLD, Oct beige book said: "Reports from the twelve Federal Reserve Districts indicate that economic activity continued to expand since the last report. Four Districts reported that economic growth firmed while a couple of Districts noted that growth cooled. Other reports generally characterized growth as moderate or mixed."

Fed Beige Book coming out in few minutes

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Heads up for Feds Beige Book: The overall message from the Feds Beige Book last time was that economic activity expanded as a somewhat stronger pace than in the previous reporting period and labor markets had tightened although wage growth around the nation was generally modest.
EUR/USD opened at 1.2540 last time and went to a 1.2570 high before ASIA.

So any deviation to a more dovish statement should send the USD weaker. Especially housing should be kept an eye on as further softening should also hurt the USD.

Expect EUR/USD to find support intra-day in the 1.3090-1.3130 area with likely small stops below support with the pair capped around the 1.3175-00 area.

Tommorrows PCE core for October should provide further volatility in USD/Majors

Silver Nears 13.865 Resistance

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The rally from the mid-Sep 10.47 low pushed above the early sep 13.27 resistance and is now within striking distance of yet another obstacle at 13.865. It's a Fibonacci retracement, marking .764 of the 15.22 to 9.48 sharp downswing.

Secondary resistance is not far off from 14.09 to 14.26, the May 17 reaction high and the point where the rise from 10.47 would equal the 9.48-13.27 rise, respectively.

Daily momentum conditions are far from stellar, a sign that the secondary resistance will likely prove a tough obstacle. But only a break of congestive support in the 12.61 to 12.42 area would confirm a reversal of the short-term bull trend from 10.47.

While above 12.42, keep focus on 13.865 and then the 14.09 to 14.26 resistance band.

Crude Oil Pushes Higher

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WTI Nymex crude oil is higher following release of US DoE weekly inventory data, which showed stronger than expected fall in all compotents. WTI Nymex crude oil is at $61.60, up 61 cents.
Helps the precious Metals

US Data reaction

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Dollar gets a kick higher as GDP revision impresses to the upside. Tsys slip, stocks lift.

US Data out : GDP, Personal Consumption

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GDP Price Index out at 1.8% vs 1.8% expected
Personal Consumption out at 2.9% vs 2.8% expected
GDP Annualized out at 2.2% vs 1.8% expected
Core PCE QoQ out at 2.2% vs 2.3% expected

Gold Update

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Market awaits for GDP data to come out at 13:30 GMT.
With lots of Volatility to trade in as traders wait for US figures.
With EUR/USD consolidating going on, USD weakness still in hands, and anticipate for further weakness to come.
Gold Daily Chart suggest a good technical Improvement, with showing readiness of a new bull ride to cross 642 channels.
Main Activity to watch is Crude Oil Inventories, it appears chances for Crude Oil to push higher, with Expectations for OPEC to do cut, if prices fall sharply.

Crude Oil Update : Kuwait Oil Minister says

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Kuwait Oil Minister reported saying,
- OPEC will need to cut oil production again if prices fall sharply
- Believes current US crude price of $61pb is 'very comfortable'
- Does not believe OPEC should cut output if current prices hold
- Crude oil stckpiles are 'high'

Main watch today is Crude Oil Inventories which will be main focus in relation to Precious Metals.

Crude Oil Update

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Saudi Oil Minister reported saying,
- Kingdom producing an average of 9mln bpd of crude oil
- Wants fair and stable oil prices

Tuesday, November 28, 2006

FX Update : USD

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The US dollar's slide continued with little reprieve overnight, trading in a 1.3184-1.3218 range against the EUR and 115.58-116.29 range against the JPY.

Despite a good day for carry trades generally, and a rebound in US equities, the market seemed to be on a hunt for stops and barriers, and generally softer US data also weighted on the USD- daurable goods for October declined by 8.3% m/m, far worse than market expectations of -5% m/m, while consumer confidence for November also disappointed at 102.9 versus consensus of 106.

EURUSD eventually broke 1.3200 late in the US session. The NZD was the strongest currency overnight, while JPY was under some pressure, indicative that the appetite for carry trades remains.

The market also chose to shrug off hawkish comments from Treasury Secretary Paulson, who said a "strong dollar was in the US' interest", and Fed Chairman Bernanke's warnings that core inflation remained "uncomfortably high".

Overall US yields finished lower in response to the weaker data, with the implied yield on the December eurodollar contract down by 4bp. With last week's dollar selloff having been largely driven by a speculative selling in relatively illiquid conditions, markets are looking for fundamental catalysts to supply more fuel for the move.

Most likely catalysts for further USD weakness in our view would be either a breakdown in the broader carry trade environment or a shift in US rate markets to more definitively price near-term Fed easing. In the coming weeks though, we expect data to increasingly provide support for our view that the Fed will cut rates at its March meeting, and we look for the environment for carry trades to steadily deteriorate as volatility rises and risk appetite normalizes.

GDP for Q3 is due out at 1330 GMT, and the market expects a rise of 1.8% annualized, versus the 1.6% in the advance estimate.

Asia Update : Japan

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Very encouraging that Japan is able to mantain an upward trend in industrial production y/y growth despite the US slowdown. Still key date to watch in Japan is consumption, which has been very weak in recent months.
Stocks opening sharply higher on the strong figure of Industrial Production

FX Update

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EUR/USD trades above 1.3200
Our target remains intact for 1.35 very soon.
As mentioned earlier, to get long in EUR/USD and Short USD/JPY.
Last week mentioned silver buy trade, 1st target 14.00 - 2nd target 14.50

Ex-Fed Chair Greenspan speaks

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Ex-Fed Chair Greenspan is speaking to an investment conference in NYC, and has reiterated that he thinks the worst of the housing mkt decline is over and that he'd not be concerned about a falling US$

Dollar Index Breaking Down

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The spot U.S. Dollar Index has slipped below 83.20 technical support, a tentative technical breakdown on the long-term charts. The index is targeting 82.68 initially.

Bernake Comments Discussion

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Bernake Comments werent any kind of a Suprise, that will change the whole image of USD.

The USD negative tone still remains in Place after his comments.

While Bernanke's comments on inflation, housing and growth "all fit in with a nice soft-landing scenario," Fed chairman also noted "substantial uncertainties" and that's a USD negative,

That's offset by Bernanke's general anti-inflation rhetoric, leaving mkt with little to seize on - "leaving the tenor an increasingly entrenched USD negative

Fed Chair Bernake Text: no change in his economic outlook

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no change in his economic outlook. Says "deceleration in econ activity currently under way appears to be taking place roughly along the lines envisioned"; hsg is cooling and auto mfg sees weaker demand but most other sectors are "expanding at a solid rate." Inflation "has been somewhat better behaved of late"; core infl still is too high but "is expected to slow gradually." Cites latest FOMC statement - inflation risks are to up-side and Fed is prepared to act "if developments warrant." Outlook is US will expand at moderate pace ahead - in '07 will return to trend. Risks are to both sides. Bernanke is speaking to business execs at the Nat'l Italian-American Foundation in NYC.

Gold Update

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Gold saw slight Profit taking after fridays big move, and a quick reversal back to 639 levels emerging new buying interests, which gives a sign that Investors are eager to buy at dips, and with USD weaker, and Crude Oil Jan Contract trading high, we are looking for a nice push higher tommorrow, with more Economic Data to flow in.
Traders also wait for Bernake speech flow in at 17:30, which shall create effect on the USD.
Technically Gold is still in a very nice Bull channel, with a continuation development of the 2nd wave.

US Data out

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Consumer Confidence 102.9 Vs 106 expected
Existing Home Sales 6.24 M vs 6.14M expected
Richmond Fed Manufacturing Index 7 vs 5 expected

USD looks weak heavily

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USD still looks weak heavily.
Market now waiting for Consumer Confidence and Existing home sales in 20 minutes at 15:00 GMT.
Both are likely to disappoint. Stay short USD.
Sell stocks on rallies and stay long fixed income

Dollar Slips after Durable goods release

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Dollar slips slightly as durable goods orders slide a steeper than expected 8.3%. Stocks futures slip from flat to small losses, Tsys lift.

US Data coming out in few minutes

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In Few minutes we have US Data coming out at 13:30 GMT
Durable Goods Orders, Durable Goods Ex. Transportation.

Precious Metals update

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636/7 level is a good support zone, where we shall see gold to stay steady and react heavily after the data release, as all the traders await for it today.
Technically Gold looks ready to push higher, with nice technical correction appearing in between.

Silver Trade Key Last week - Buy 13.391, looking for this week for silver to push higher, with USD weakness still remains handy.

Main Focus remains today on Economic Datas and Bernake Speech at 17:30 GMT.

Whats going in the market?

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Cluster of important data ahead of us. Today: Existing Home Sales, Durable Goods Orders and Consumer Confidence. Tomorrow: GDP (3Q). There is a good chance that these figures will trigger a break of the all-important 108-24 in US10Y’s (buy at the break).

Expect consolidation in USD majors before data.

Stocks finally pricing in a gradual slowdown in the US. This could end like in May. Sell into strength.

Crude Oil looking like a come-back.

OECD sees US Fed rare on hold

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OECD sees U.S. Fed rate on hold throughout 2007, Two cuts to 4.75% by end-2008.
OECD says Eurozone rates need to rise further possibly even in 2008.

Monday, November 27, 2006

Gold Update

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Asia opening is seeing with slight profit taking in hands, getting prepared for various Economic Datas to be released today.
Gold is performing nicely, and is mantaining its nice 2nd wave approach, aiming to push higher crossing 642 resistance zone.
With trading in tight ranges, we shall soon see this break-out very near, confirming with USD weakness remaining in hands, and in relation to Crude Oil bullish momentum, with talks moving that OPEC is looking for 2nd cut.

FX Update : USD

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The US dollar remained under pressure overnight, as did the stock markets with the S&P 500 easing 1.4% despite the firm UBS investor optimism survey and anecdotal reports of good holiday weekend sales in the US.

That said, the USD held off the lows against both the EUR and the JPY seen during the Asia session on Monday. The bond market sold off early on talk of the strong weekend sales but rallied back on a sharp decline in stocks, ostensibly on asset reallocation trades from stocks to bonds.

With risk aversion rising - the VIX index jumping more than 20% higher from last week's low to the highest in almost two months - and vols elevated, risk-adjusted returns on carry trades will be squeezed further.

Although for now an extended period of USD weakness is probably back, the same cannot yet be said of carry trade unwinding, given the fact that the USD was slightly weaker against the IDR, INR and ZAR overnight. Remain long EURUSD and Short USD/JPY as a trade recommendation.

We have a busy data and event schedule today for the US market, with Treasury Sec Paulson speaking on the markets at 0900GMT in London, while the Fed's Bernanke (1730GMT), Plosser (1730GMT) and Moskow (2130GMT) are all speaking on the US economic outlook. On the data front, the important existing home sales, durable goods orders, Conference Board consumer confidence and the Richmond Fed manufacturing survey are all due for release later today.

Sunday, November 26, 2006

USD weakness right from the start of the new week

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USD is sharply lower right from the start of the new week, as heavy stop-losses triggered above 1.3100 in EUR/USD and above 152.00 in EUR/JPY, a lot of them option related, as traders were short volatility and now try to get out.
Thin liquidity exaggerates moves. We expect USD weakness to continue when Japan comes in.

FX Update : EUR/USD

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The dollar dropped to a new 19-month low this morning in Australia to 1.3163 versus the euro and fell against the yen on speculation slowing US growth will lead the Federal Reserve to cut interest rates as the European Central Bank boosts them.
Next major resistance is 1.3455 highs from March 2005

Friday, November 24, 2006

Weekly Silver Update

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Silver Weekly Update - Buying at around 13.391 with target 14.50 next week and stop at 13.000
The Metal has broken the 5th of September high and looks to go higher at continued USD weakness. Silver is quite volatile (more than gold) and has a more convincing upside, since the supply-demand situation is still rather tight.
Technically, quite bullish

EUR/USD clearing 1.3100 - BIG DAY

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Another Level of USD weakness on the table.
A big jump in EUR/USD clearing 1.3100
Its definate a Big day for all the LONGS.
Shall we say a Prepared Christmas already for all the Longs :) It Definate should be having with 155 Pips upwards.
Precious Metals is preparing for a big Shot Off.

Gold Update

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Gold is pushing deep higher, with a nice fall in USD, we are seeing a good Wave forming, and aim for gold to clear 637 levels and move higher at 642. With nice Technical upward channel opening. Main focus is keep an eye on Dollar.
Futures Gold - Aiming for 648 levels.

FX Update : EUR/USD

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EUR/USD breaks higher, and cleared easily above 1.30 , now trading 1.3065 levels. There is nothing fundamental, due to less Liquidity, and Thanksgiving holiday in US, we have seen a nice technical resistance breakup.
It appears sooner we shall see 1.35, as technical levels are cleared, things are solid.
And USD Index shows more weakness to come in USD, which shall push EUR upwards, and help the rally in Precious Metals.
With USD/JPY pushing to a new low, our Aim is 114 in 1 month time.

Whats going in the market?

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Strong IFO figures from Germany yesterday. EUR/USD moves higher, crosses 1.30 levels, Heavy USD weakness helps precious Metals

At further USD weakness, make sure to be long silver.

Stocks still in bull channels. But Europe could get hurt by USD weakness.

US 10-Year Treasuries will outperform Bunds over the next quarter or even year, as the US economy is longer and at a more mature point in the business cycle than Europe.

Thursday, November 23, 2006

Forex Update - USD

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The US dollar has stayed in a weaker 1.2928-1.2945 range against the EUR and a 116.61-116.82 range against the JPY this morning in Asia after weakening sharply overnight.
The weakness of the dollar since mid-October has caused EURSUSD to trade back to the top end of its H2 2006 range, catching many participants, including long-term USD bears like us, by surprise.
This is similar to the price action of H2 2002 when EURUSD traded in a 0.96-1.02 range for most of the second half, before breaking out to the topside in December 2002 and rallying all the way to 1.19 in March 2003.
We continue to see the EUR overshooting next year towards 1.40 before returning back to 1.30. But in the near term we want to see EURUSD close above 1.30 before concluding that the pair's six-month range has finally broken out to the top side.

With US markets closed for Thanksgiving, trading is likely to be subdued for the rest of the week. But next week we have ISM, weekly jobless claims and housing data. The claims numbers in particular should be watched closely. Yesterday's release showed another pick up in claims and if next week's number is similarly higher than expected, then financial markets will start to conclude that the weakness of the housing market is finally spilling over into the rest of the economy. This would cause the Fed to cut interest rates and for the USD to fall.

Whats going in the market?

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Dollar going weaker across the board. With lack of data today we look to trade technical breaks in EURUSD and USDJPY. But volatility is likely only to be found in the European session as the US celebrates Thanksgiving holiday.

USD weakness/FX volatility key for equity markets heading into the weekend. Grind higher in Europe slower and slower and a rounded top seems in place in FTSE 100. DAX resistance 6490-6500.

US stock market closed today, half day tomorrow.

Nymex, Comex and CBOT also closed Friday.

Wednesday, November 22, 2006

NYMEX Jan Contract pushes down

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January NYMEX contract trading with sizeable losses after earlier reported inventory build. Contract trades at $58.71, down $1.46.

Gold Update

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The Main Resistance levels are cleared, the Volume has decreased yet right now. UtMost Many Fund Managers who trade with us, and Other Outsiders Fund Managers we converse with, they are considering it as Buy at Dip Opportunity.

However, this Dip was healthy, it happened Due to Crude Oil, and no another reasons, Before Crude Oil Inventory how was the Momenum ?? There was Nice Buying Interests, And Yes After the Crude Oil People start Quickly closing there Positions to book the Money, and then Buy Again in the Dip.. It shouldnt consider panicky situation.

Technically Gold is Bullish, Other Factors are helping it, However Crude Oil Inventories are little offshedding the prices, but we shall consider other remaining factors.

However, it looks Confirmed OPEC will go for 2nd CUT.

Gold Update

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Gold pushes back to 628 level - Support Zone as crude Oil prices start dropping, with Dollar weak as well, we are seeing slight balancing of the Gold pricing, however much corelation goes with Crude Oil Movements.
We have also seen Profit taking by few traders due to holidays in US, where many onfloor traders at Exchanges, will be leaving earlier as well.
However, Momentum is still strong for Precious Metals, and its a Solid Uptrend forming a nice Wave.

Crude Oil Update

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Crude oil is lower in the wake of the DoE supply data, which showed crude oil supplies rising 5.1mln barrels for the week ended Nov 17, i.e almost 7 times more than expected.

Gasoline supplies rose more than expected at 1.4mln barrels vs expectations of 750k fall, whilst distillate supplies was more or less as expected at 1.2mln barrel draw.

WTI Nymex crude oil is currently at $59.39.

This is effecting Precious Metals as well, though with Weak Dollar we are seeing little balanced out with Gold trying to stay above 630/631.

Oil Inventories out

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Crude Oil out at 5161K vs 700K expected
Gasoline out at 1406K vs -750K expected
Distillate out at -1198 K vs 1100 K expected

US Data out : 15:00 GMT

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U.Of Michigan Consumer out at 92.1 vs 93.3 expected

HEAVY DOLLAR WEAKNESS

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With heavy dollar weakness everywhere
EUR/USD pushing higher towards 1.2915+
USD/JPY made new lows at 116.74 levels
The momentum is helping the precious metals push higher, Aiming for 636 as we analyzed earlier today.
With Crude Oil Inventories today, we shall see a nice momentum developing ahead.

US Data : 13:30 GMT out

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Initial Jobless Claims out at 321K vs 310K expected
Continuing Claims out at 2454K vs 2430K expected

Gold Update

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Gold crosses the 630 level resistance, with dollar weakness heavily on the boards, and with Crude Oil inventories coming out today which shall hope for a rally in Crude Oil, helping precious metals.
We are looking for 636 to cross soon today, confirming such push remains upfront.
With a solid Technical Picture, gold Aims for higher.
We have Initial Jobless Claims and Continuing Claims coming out at 13:30 GMT which shall be main focus with Crude Oil Inventories


Trade Forex, Gold/Silver, Equities, Futures, CFDs, Energy Derivaties, Fixed Incomes, with us having only single account and achieve various benefits, Start trading Online in minutes, for more information please drop email at owaissivany@yahoo.co.uk.

Tuesday, November 21, 2006

Gold Update

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Gold trades higher due to Weaker dollar and Crude Oil Pushing higher.
Gold tries to cross 630 level, to meet 636 levels again and push higher.
It appears we shall see 630+ by NY Opening, due to Crude Oil Inventories which shall support the Crude Oil Rally, as well USD weakness seen.
Technically 2nd wave is building very Perfectly, and we are looking for a new high very soon.

FOREX EUROPE UPDATE - USD

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The US dollar softened overnight with USDJPY leading the way, trading in a 117.46-117.92 range in Asia while EURUSD traded within 1.2840-1.2872. We believe dollar weakness is mainly a function of positioning adjustment ahead of the Thanksgiving holiday in the US and on the back of lower yields and higher oil prices on supply concerns.

Oil prices were marginally lower in Asia but remain above US$60/bbl, boosted by news of a sharp drop in output from the Trans Alaska pipeline due to strong winds.

AUDUSD traded higher on the news that Australia's biggest airline received a takeover approach from Macquarie Bank Ltd and Texas Pacific Group. In the past, however, the AUD, NZD and JPY suffered when the global economy begun to slow down.

On Tuesday, Fed Governor Warsh said that inflation "remains uncomfortably elevated" and that there are clear risks that inflation won't come down. He said that growth was "resilient" and will likely accelerate from the pace in Q3 as the housing market stabilizes.

Todays data is limited to the University of Michigan consumer confidence index final October reading and jobless claims for the week ended Nov 18, ahead of the Thanksgiving holiday tomorrow.

Whats going in the market?

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Stocks still going higher, but only making modest gains.

Crude Oil back around 60 dollars/bbl. Inventories today. Likely to see OPEC announcing a cut soon.

Could we get some surprise strength in CAD? Watch out for CPI figures today. USDCAD looks toppish.

BoE Minutes today = GBP strength in store?

Fixed Income caught in narrow ranges below highs. Good risk-reward for the shorts here.

Oil Update : Nigeria

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Wires reporting Nigerian security services saying suspected militants have siezed hostages on a Nigerian oil industry vessel.

Crude Oil : Kuwait Oil Minister says

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Kuwait Oil Minister reported saying:
- OPEC will cut output again in December if oil prices 'deteriorate'
- Oil prices of US$55-60pb are 'very satisfying' for Kuwait.

Futures : Platinum

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Platinum up 200 USD/oz at 1280 since 1. Nov, on speculative buying based on a possible EFT launch, options related activity and strong gains in Tokyo's market.
A Platinum EFT could increase the physical demand significantly in the short to mid term.

Gold Aims to cross 628/630

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Golds Main Aim is to cross 628/630 levels aiming for 638.
Crossing 628/630 shall form a nice Bullish Pattern, and a continous Development of 2nd wave.
Crude Oil Rally is indeed supporting the precious metals to go together upwards.

Crude Oil Pushing higher

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WTI Nymex crude oil is trading above $59.00 on reports that loadings at Valdez, Alaska, were interrupted on Monday due to bad weather.

The Trans Alaska Pipeline is now reportedly operating at only 25% capacity.

Also underpinning prices is recent talk from OPEC that it will further cut output when it meets again on Dec 14 in Abuja, Nigeria.

However, the validity of the past 1.2mln bpd output cut has been bought into question, with some reports that OPEC shipments have actually increased by 210 mn bpd in the month ending Nov 4.

WTI Nymex crude oil is currently at $59.40, up 60 cents.

The Rally Supports Precious Metals - Gold trading 626 levels, Silver 12.9+

Futures : WTI Crude

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WTI Crude rallies 25 cents after breaking though 59.20 resistance, creating a new day high at 59.46

Precious Metals update

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Gold, silver and palladium traded quietly and without feature yesterday taking a back seat to the surge in platinum. Over the past few months we noted how the September sel-off in platinum had been accompanied by a tightening in platinum interest rates and that we suspected that this tightening would herald a recovery in platinum. This happened in early November with the metal trading more than $100 higher within a few days.

After a week or two of calm, platinum has again marched to the forefront, with buying seen in the spot and options market and borrowing noted in the forwards. The moves in the spot price are the most obvious, with platinum apparently trading as high as $1395/oz in Asia on Tuesday, according to Reuters, from a New York close of about $1260 on Monday and less than $1200 on Friday.

Forwards have tightened sharply too with one-month lease rates moving from about 4% on Friday to about 20% on Monday and substantially higher than that in Tuesday's Asian trading. It is impossible to forecast where platinum will head in the short term as tightness could drive the spot price higher still - or alternatively we may have seen the highs in today's Asian trade.

But on a longer term view we know that these events are normally short-lived and when liquidity returns to the forward market, the price will probably fall: certainly there will be little buying from price-sensitive Chinese consumers with spot and funding costs so high. Indeed we believe the longer-term prospects for platinum demand have been damaged by this move.

It will accelerate substitution efforts from industrial users of the metal and with Chinese jewellers unable or unwilling to buy platinum ahead of Chinese New Year, it will prompt a switch to other precious metals - white gold, yellow gold and palladium. One thing is certain, however: volatility and illiquidity is set to continue in the short term.

ITALY : Airport closed due to bomb threat

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Rome Airport Authority confirms that Ciampino Airport closed due to bomb threat

2nd wave develops in Gold

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Gold is in preparation to develop 2nd wave, we are seeing various Fund Managers investing fresh new money, and with Dollar weakness remaining on the boards, we are seeing solid support in the Precious Metals.
642 level remains the first target, next target remains 670 level. Focusing towards 730+
With a nice rejection at 615 levels MA100 zone, where Heavy support lies.

Monday, November 20, 2006

Gold Update

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Gold pushes higher as mentioned earlier today Asia Morning.
We are looking for it to hit at 628/629 levels, and Hold tight in that range, by the time we shall face 15:00 GMT - Leading Indicator Index MoM, which shall give little impact to the Precious Metals.
However, 628/629 indicates for Intra-Day resistance Zone.
Crossing the resistance level, confirms a good Bullish channel, and Development for 2nd Wave, as stated earlier.

We shall Advice further shortly.
Keep tight focus over Crude Oil and Dollar.




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Forex Update - USD

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The USD traded slightly softer against the EUR in a 1.2817-1.2846 range overnight. Following comments from ECB President Trichet, the EUR jumped against the USD and the JPY, with EURJPY trading in a 151.05-151.46 range. Japanese stocks traded lower overnight despite easing crude oil prices (January futures stay at 58.36$ a barrel). ECB President Trichet and his Group of 10 colleagues, meeting in Sydney over the weekend, signalled confidence in the global economic outlook, which according to Trichet "remains very, very dynamic".

Other than that, the references to action on exchange rate flexibility in the G20 communique were very indirect, and limited to merely describing the benefits of flexibility rather than urging immediate action. Carry trades don't appear to have been discussed explicitly at the meetings, although there was calls for further normalization in monetary policy to cope with inflation pressures. The BIS sponsored forum of G10 central bankers also has met on the sidelines of the G20 and group spokesman Jean Claude Trichet will hold his usual post-meeting press conference later today.

The ECB also holds a "high level seminar" with the EMEAP group of central bankers from the Asia-Pacific region, which includes the BOJ, PBoC, RBA, and RBNZ, concluding with a joint Trichet/Bollard press conference on Tuesday. It's a light week for US data ahead of US Thanksgiving on Thursday.

Treasury Secretary Paulson speaks on capital market regulation later today at 2000 GMT on "Competitiveness of the US Capital Markets".

Spot Gold Update

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Weak oil weighed on precious metals early on during Friday's trade, but gold bounced off $615/oz for the third time in a week, reinforcing the importance of this support level.

The yellow metal then ground higher as crude recovered some of the day's losses and once gold had regained $620/oz, the market turned quiet for a while. Platinum's recovery from early losses helped gold drive higher in late trading and the metal closed around $622.50, just off the session's high. The story of the day was platinum, however, which hit a two-week low of $1140/oz and then climbed twenty dollars at the afternoon fixing as one player bought about 40koz. Platinum was around $1180/oz at the end of Nymex trading and was firm after the market close.

In Asian trade on Monday, gold edged higher still, while platinum again made solid gains, trading to a high of about $1207/oz. Gold appears to be settling into a solid, if rather wide ranges. Although sagging crude and soft base metals have kept the metal rather heavy, a weaker dollar is preventing the metal from free-falling. Short-dated options sellers are loading the options market with gamma and this is helping reinforce the range.

Equities Update

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Indicies still in bull channels, but are looking more and more fragile. Friday good for US stocks despite weak housing figures.
Nikkei posted biggest drop in 10 weeks breaking important support level at 15890. Topix fell 2.5%. Bad earnings sparked the downside reaction.
Look for a drop in indicies today after Trichet’s comments and higher German PPI. No important releases today.
Short DAX – intraday.

Sunday, November 19, 2006

Whats going in the market?

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FTSE and ASX in big sell-offs. Other indices also looking over-exhausted.

Fixed Income pushing higher in all regions, pricing in a global slowdown. Same goes for energy.

European currencies should go higher in this kind of environment. AUD and JPY should go lower.

Gold Update

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Dollar weakness seen with EUR/USD jumping to the higher 1.2840 levels, helping the precious metals to push slightly higher, It appears we shall see Buying interests today, with no US Economic Indicators today, we shall see much buying force, rejection of last week at MA100 levels, is the starting of 2nd wave, which is Technically been seen.
Main focus shall lye on Crude Oil, where its rally supports the Precious Metals.

Friday, November 17, 2006

USD Weaknes -

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USD Continues to weaken - A Friday rumour going around that a US Fund is in trouble. No details given

Gold Update - Dollar weak

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Dollar weak on the boards.
Gold reverses as mentioned after touching MA100 levels, and pushing higher at 621+ levels.
Crude Oil is pushing itself upwards as well, which is helping the precious metals to push higher.
We are continuing to see a nice 2nd wave Developing for Gold.
And Market Pressure remains in the market.
It Appears Next week a Rally upwards shall be seen.

Gold

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Gold is pushing towards 613.50 MA100.
It should bounce from there.
Or we shall meet with 200 MA - 607.90 level

US Data out

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US housing starts Oct out at 1486K vs 1680K expected
US building Permits Oct out at 1535K vs 1630K expected

Dollar Sees slight slippage in the wake of the soft housing starts data but losses are minimal.

FEDs Fisher says

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FEDs Fisher out saying, he doesnt see large shock to replace USD as the world tops currency. Says he would encourage deeper and broader EUR holdings in CB reserves, but doesnt see that the USD's role in reserves will be displaced

ECBs Liebscher speaks

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ECB's Liebscher speaks in Innsbrucks says rates are still too low, growth trend still pointing upward and there's no change in ECB economic assessment. EUR comes a bit higher on these remarks though nothing major

Crude Oil - Breaks below $55

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Dec Nymex crude oil extends falls and breaks below $55.00 -- hits lowest level since June 14, 2005.
Gold is still above 613.50 even though Crude Oil is pushing Downwards.
We need to see how NY reacts, and after Economic Data.
Its Important for not getting any Margin Call, so keep enough funds, if you require more information drop us an email at owaissivany@yahoo.co.uk

Now Since Crude Oil is Definately pushing downwards, Its REVERSAL to upwards will be huge, and will push Precious Metals upwards

We await for US Economic Data today


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Gold Update

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Gold Market still looks healthy, market is currently awaiting for US Economic Data releasing today, which shall be IMPORTANT to watch for.
Gold stays above MA100 - 613.50
And Wednesday lows.
Even though Market is facing with Crude Oil Bearish Sentiment and Dollar Strength,
Gold is Mantaining its Solid Movement, and Staying above Key levels.




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Thursday, November 16, 2006

Crude Oil - Plunged to their lowest level in 17 months

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Global crude oil prices plunged to their lowest level in 17 months in Asian trade as market sentiment worsened over OPEC's production cuts and other bearish factors. At 0515GMT, New York's main contract, light sweet crude for delivery in December, was $0.05 lower at $56.20 a barrel. The contract had touched a low of $55.99 earlier in the session.

Precious Metals Update

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What a lovely day for Precious Metals.
We saw Nice Dollar Strength, And a Drop in Crude Oil, But Gold/Silver mantained there levels, with slight drop, however, above its last drop on Wednesday. We still have Fund Managers in Positions with us, Many Investors are considering it as Buying Opportunity.
Even though Profit taking is on the Books, we are seeing Nice Investment pressure in the Market.

Gold is Technically Correcting itself very wonderfully, and its definately making its 2nd wave.
We have now seen 4 days Drop, comparing to 9 Days Rally Upwards.

Now Crude Oil, has broken Technical Levels, and chances for it to hit 53 levels, and REVERSE.
Even though Crude Oil is Pushing down, Gold is Maintaning its VALUE and holding above 613.50 levels.
Now Once the Reversal Begins in Crude Oil, It will support RALLY for Precious Metals.

What the Energy Derivatives Players are wanting is they want OPEC to cut more Production, Though by forcing the price downwards they are trying to Indirectly pass the message, for OPEC to take its next move, As OPEC doesnt wants Price moving below 55 levels.

We are definately Happy with Gold Performance.

MAIN KEY IS MANTAIN GOOD PROTFOLIO, for not getting any Margin Calls, and All is good.

Next week looks brighter.

We have Housing Starts and Building Permits on Friday, which are Another IMPORTANT ECONOMIC DATA..And it can change the Whole Impact on the Market. Thats where main focus shall lye on.



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US Data out : 14:15 GMT

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Industrial Production MoM out at 0.2% vs 0.3% expected
Capacity Utilization out at 82.2% vs 82.0% expected

Fed Kroszner says

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Worldwide inflation picture suggests low inflation will last, inflation volatility has declined almost everywhere. Technology and innovation are enhancing emerg mkts.

US Data : 14:15 GMT

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We have Industrial Production MoM and Capacity Utilization coming at 14:15 GMT
Main Set of Economic Data,
And Later we have at 15:30 GMT - EIA Natural Gas Storage
17:00 GMT - Philadelphia Fed.

US Data out : 14:00 GMT

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Net Foreign Security Purchases out at $65.1B vs $72.5B

US Data : 14:00 GMT

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Net Foreign Security Purchases coming out at in few minutes at 14:00 GMT

Treasuries breaking higher

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Treasuries breaking higher after a milder than expected US CPI, 10yr not testing the 108-20 resistance.
Next figure to watch is Industrial Production and Philadelphia Fed.

Reaction after Data

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Gold Pushing higher.
As mentioned earlier its a Bullish Pattern forming, and 2nd wave developing. We shall see the reaction after the Economic Date,
EUR/USD pushed higher towards 1.2840 level, and comes down with a Quick profit intake.
DOllar weakness shown on the Board.
Set of Other datas to come shortly.

US Data out : 13:30 GMT

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Initial Jobless Claims out at 308K vs 311K expected
Continuing Claims out at 2443K vs 2430K expected

US Data out : 13:30 GMT

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CPI (MoM) out at -0.5% vs -0.3% expected
CPI Ex. Food & Energy MoM out at 0.1 vs 0.2% expected

FX Update : US CPI in 10 Minutes

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US CPI coming out in 10 minutes.
A reading below the 0.2% expected should lead EUR/USD to a test break of 1.2835 and possibly 1.2855.
A reading above the 0.2% should lead to a test of 1.2765 support with a break giving scope for a test of 1.2700-20 levels

US Data coming in few minutes

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In Few minutes we have US Economic Data coming up,
CPI, Intial Jobless Claims and Continuing Claims coming out at 13:30 GMT.
Traders have been waiting for the data, we shall see solid movement after the release of the data.
We will be having another set of datas coming out at 14:00 and 14:15 GMT, and we shall be posting on it

FX Update : UK Retail Sales higher than Expected - GBP Gains

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UK Retail Sales OCt out at 0.9% vs 0.3% expected (YoY) out at 3.9% vs 3.2 expected.
A Solid Push Upwards, GBP gains

UK Data coming out in few minutes

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If we see dissapointing retail sales in 10 minutes from the UK on top of yesterdays dissapointing CPI data, GBP/USD should have another test to the downside.

Whats going in the market?

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FOMC showed incoming data was broadly as anticipated. Housing to remain a substantial drag but was not spilling into consumer spending; labor market remained tight.

It looks like the FOMC is still a bit more concerned about inflation being too high rather than growth too low. US CPI today should be the main focus to look for.

For stocks, soft landing theme still carries the market higher. All indices trading near channel resistance, today’s data could trigger sell-offs.

Wednesday, November 15, 2006

FX Update : China Urban fixed Asset Investment rose...

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Chinas urban fixed asset investment rose 26.8% yoy in the first ten months of the year to 7.007 trillion yuan, the National Bureau of Statistics (NBS) said. Investment growth slowed from the Jan to Sep Figure of 28.2%

FOREX ASIA UPDATE - USD

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The market has seen repeated rounds of sell-offs and rallies but with the USD index still trapped within a 3% range since June.
Yesterday's stronger than expected NY Fed and the lingering implicit bias towards tightening in the FOMC minutes saw USDJPY hitting the 118 mark again.
With the environment for carry trades still healthy, and markets not likely to price Fed easing too aggressively yet, we think dollar downside is likely to remain contained in the near term.

It seems likely that USDJPY sellers could return above this level again, especially if we get more hawkish statements from the BoJ policy meeting later today.

A busy US data calendar today - led by the core CPI, industrial production, HMI and the Philly Fed - could also dampen USD optimism. We expect another fairly tame rise in the core CPI, still low jobless claims, soft manufacturing data, only a modest rebound in the Philly Fed index, to 5.0 (consensus: 5.4) from -0.7, and some further weakening in housing demand as we look for the housing market index easing to 30 (consensus: 30) after 31.
Also today, Fed Governor Krozner speaks at 1410 GMT, St. Louis Fed Pres. Poole at 1445 GMT, and Chicago Fed Pres. Moskow at 1500 GMT.

Trade Idea - Gold

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Gold looks bullish.
Buy at around 626
Stop at 620
Target 636
Keep Tight Stops, however it appears 2nd wave is being developed.

Gold Update

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We Posted a Technical Chart around 1 month back, and we mentioned there were 5 Small Downward Waves which have already developed. Now we will be seeing 5 Big Upwards Waves, and a Solid Straight Wave Upwards, and then Correction again.
We have 1 Upward Wave already now. and this Correction to 615.50 level, was developing a 2nd Upward Wave, which can be also said as SWING LOW, you can check the chart at
http://goldtradin.blogspot.com/2006/10/swing-low-confirming-uptrend-in-gold.html

However we shall also look at Fundamental reactions, which is the set of Economic Indicators releasing today, and we shall keep posting on more information.
There is Definately Buying Pressure in the Market, and lots of Solid Buying Interest developing by Investors, which is a Good Key.
An Upward Push on Thursday, Shall Confirm a 2nd Wave Developing, for to cross above 635 and Next meeting point 641/2.
Gold trades currently at 624.50 in Positive Zone, And in Lane of Forming a 2nd Wave.

We shall Advice further.

Gold Update

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We Posted a Technical Chart around 1 month back, and we mentioned there were 5 Small Downward Waves already developed. Now we will see 5 Big Upwards Waves, and a Solid Straight Wave Upwards, and then Correction again.
We have 1 Upward Wave already now. and this Correction to 615.50 level, was developing a 2nd Upward Wave.
However we shall also look at Fundamental reactions, which is the set of Economic Indicators releasing today, and we shall keep posting on more information.
There is Definately Buying Pressure in the Market, and lots of Solid Buying Interest developing by Investors, which is a Good Key.
An Upward Push on Thursday, Shall Confirm a 2nd Wave Developing, for to cross above 635 and Next meeting point 641/2.
Gold trades currently at 624.50 in Positive Zone, And in Lane of Forming a 2nd Wave.

Precious Metals Update

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We have some very Important Economic Datas coming up thursday and Friday, which can change the whole Picture for the precious metals.
The dip around 615.50 level on Wednesday, where Reversal took place, was an Advantage, the Rally took place, due to Crude Oil Inventories which came Positive for Crude Oil to Push higher.
We have Set of economic Datas today, which will be Highly focused.
We might See back to 635+ Again

OR we should see 613.50 First Touch, if Support doesnt mantains there, where 100 MA - Daily Chart lies.
OR else we shall touch 607.80 where 200 MA - Daily Chart Lies.
These are Important Numbers.

However, we have been notified there are some Big Fund managers who are Still Holding there LONG Positions, and i presume most of the people are, Momentarily, we have seen nice Profit-Taking, at the same time, we have seen a Nice technical Bullish Channel Forming up.

Main Key is to Look out for Set of Economic Indicators on Thursday and Friday. And we shall be Reporting them here, as they come out. Focus Closely on USD Index and Crude Oil.

Gold Update

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Gold is trading above 620 now, and back to positive territory after Crude Oil Inventories.
It appears the dip downwards is done, and we shall see a new Buying Opportunity, however traders main focus remains at FOMC minutes, which shall give a much clearer picturer.
Main key: Await for it, to obtain solid clear view on USD short term.

Gold Update

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Gold is correcting for a long term bullish movement, Gold is bringing new investments and we are seeing profit taking as well appearing.
618 holds very nicely, there are slight chances for gold to hit 613.50 levels and reverse, emerging new Buying Opportunities.
There are still many fund managers on Long Positions for Precious Metals.
However, the call is keep enough funds to be safe from any Margin call.
We are overall looking for a Bullish Momentum following up.
With Crude Oil Inventories today, a Push in crude Oil, will be a Rally for Precious Metals. We keep a sharp eye over it.
Dollar weakness remains on the boards, with a little consolidation taking place.

Technically Gold is correcting it self, after having a Sharp 9 days rally upwards, it does needs a little correction, to form a new bullish pattern, currently gold is performing well, and correcting itself very nicely.
If there was any sign of HEAVY BEARISH momentum, we would have already touched 610 in 3 days period, But the Pressure of Buying is in the Market and increasing and keeping the prices in range of 617.50 - 626/628 flow, and in such moments its TECHNICALLY correcting as well too.

Tuesday, November 14, 2006

FOREX ASIA UPDATE - USD

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After the early Tuesday retreat following the stronger than expected Japan GDP, the USD stabilised in the North American session despite generally weaker domestic data releases. At the weaker end of the recent USD ranges, the market seems to need more encouragement such as a clearer shift in the Fed's stance to hurt the dollar further.

Overnight, both growth and inflation data - from the downward revisions to earlier month retail sales numbers and a tame PPI - were weak. Ex-auto retail sales fell 0.4% after a 1.2% drop in September (revised from -0.5%) and 0.0% in August (revised from +0.2%). There was also the record-tying 1.6%m/m plunge in the overall finished goods PPI in October while the core PPI excluding cars and trucks rose only 0.1%, unchanged from the previous three months. But US yields didn't sustain their initial reactive move lower and the USD also rebounded after initially selling off.

Yesterday's comments from Poole seemed to acknowledge more concern about the housing market, but he also said the policy outlook is symmetrical. With Fed officials consistently maintaining a symmetrical policy risk message in their public comments so far, markets have been cautious about pricing in much risk of easing through Q1 of next year.

Today, we expect a weaker NY Fed's Empire State manufacturing survey after the exaggerated rise in October. The minutes to the October 24-25 FOMC meeting will be released at 1900GMT. We expect the minutes to show officials comfortable with staying on hold for now, but also significant uncertainty on what happens next.

Precious Metals Update

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The precious metal has been pushed and pulled by dollar swings on the day. While there is still scope for a retest of Monday's high around $635.50, additional profit-taking may also be seen.

Gold has recently been underpinned by solid fund demand and may do so Tuesday also. Modest profit-taking has caused some price slippage this morning, but with fund players still keen to buy dips and oil prices stable above $58/barrel, the outlook remains positive with chart support pegged at $620/618 and the 100-day MA at $613.20.

US Data out

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IBD/TIPP Economic Optimism out at 55.7 vs 52.4 prior
Business Inventories out at 0.4% vs 0.6% expected

FOMC Minutes will now be released tommorrow

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FOMC minutes from the Oct 24-25 meeting will be released tomorrow, Wed, November 15 at 2 p.m. The minutes were originally scheduled for today when the Fed meeting was a one day meeting.

Another US Data coming out in 30 minutes

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Market awaits for another US Data to flow in at 15:00 GMT
IBD/TIPP Economic Optimism
Business Inventories

FX update : EUR/USD

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EUR/USD finally hitting small stops above 1.2865 but offers prevail.
Talk circulating of a large barrier just above 1.2900 level being linked to supply seen today and Friday around the highs

Treasuries Update - Clear Picture for Fed to cut rates

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10 year note jumping on the US figures setting a scenario of no inflation risk and weaker than expected retails sales leaving space for the Federal Reserve to cut Rates in 2007 to concentrate on growth only.

Dollar Weakness after PPI data

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Dollar tapped lower as PPI data comes in very soft/
Stock futures spike higher, as do Treasuries.

US Data Released

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PPI Mom -1.6% vs -0.5% expected
PPI Ex. Food & Energy Mom -0.9% vs 0.1% expected
Advance Retail Sales -0.2% vs -0.4% expected
Retail Sales Ex-Autos Mom -0.4% vs -0.2% expected

Important US Data coming out in few mintues

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In few minutes we have US Data coming out at 13:30 GMT.
PPI, Advance Retail Sales.
Important Economic Data.

Market Update

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Market awaits for important US Economic Data to be released today, Main focus remains on Retail Sales, which can change the momentum of the market, and short-term provide signal for USD and Precious Metals.
Gold currently is in tight ranges, awaiting for the Data to be released, to pick up a solid movement. 621 level has been a good support zone.

Iran cuts dollar-based transactions.

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Iran said it is reducing its dollar-based transactions to a "minimum level" in response to US restrictions on Iranian banks.

"We will carry out our foreign currency transactions with currencies other than the dollar, and our use of the dollar will reach a minimum level," Economy Minister Davoud Danesh Jafari was quoted as saying by student news agency ISNA.

"Some US banks have been disrupting our dollar-transactions for a long time and Iran, in return, has been decreasing its dependence on dollar," he added, without elaborating.

The move comes after the US Treasury Department said in September it had barred Iran's state-run Bank Saderat from having any links with US-owned banks because of its "support for terrorism."

Crude Oil Update

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Kuwait to urge OPEC to cut again if prices stay below $60.00-
- OPEC will study second cut if prices remain at present levels.

Monday, November 13, 2006

FX Update : USD

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The US dollar was slightly firmer overnight, reversing the earlier Asian and European session's weakness as the EUR rally stalls at 1.2878 while the JPY repelled sharply off 117.28. A lack of follow through left these currencies vulnerable to position liquidation against the USD.

The stock market advanced while the yield curve saw a bear flattening as the market sold off steadily as caution prevailed ahead of the PPI and retail sales numbers today. This gave the USD some much needed rates support.

But key data due today, both domestically and elsewhere, are likely to set a clearer near-term direction in the USD than what has been seen over the last two sessions.

German ZEW at 1000GMT, Euro Q3 preliminary GDP also at 1000GMT and the US core PPI and retail sales numbers at 1330GMT are all likely to have some traction on the USD, the JPY and the EUR today.

Today, we expect retail sales to have declined in October, dragged down by the auto and gasoline components. Excluding gasoline and auto, we expect sales rose modestly after 0.8% in September.
Falling gasoline prices are likely to depress the overall finished goods PPI in October.
There are also numerous Fed speakers on the calendar, with Fed Presidents Poole, Minehan, and Yellen are scheduled to speak later today.

Gold Update

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Gold went around 622 levels where intra-day support lied, we did see some Big finger pushing the gold down for few seconds, and which reversed quickly.
However, Gold is Pushing higher now, as expected emerging new buying Opportunity for the NY traders.
Gold trades around 624 levels, with new Investment coming in from NY traders.

ECB GONZALEZ-PARAMO Says

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Gonzalez Paramo Says rates continue to be "accomodative"
- ECB is in a position of "strong vigilance"
- Says monetary, economic analysis point to upside inflation risk.

Gold Update

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Gold crossed the 625/626 level, and standing above 622 Another Support.
Gold pushed lower due to little Dollar Strength shown, due to ECB member speech passing by, and as well Crude Oil crossing below 59 levels.
However, It brings up a new buying Opportunity for NY traders.
The Flow could be high today from NY side.

FX Update : ECB caution on Raising rates

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UNICE said the ECB should go ahead with its widely expected December rate hike to 3.5% and then pause to evaluate several risks to Europe's economy.

The group cautioned that the ECB's rate tightening could cause the euro to appreciate, making European exports more expensive.

UNICE also said economic growth in the E.U.'s 25 member states could be fragile and further rate rises could prove an impediment to growth.

"After the December hike, the ECB should wait for convincing evidence of decisive inflationary pressure before deciding or flirting with new action," UNICE President Ernest-Antoine Seilliere said.

Slight Dollar strength showing all around the board, todays ECB Member speeches, could change the tone of the market short-term.

NYMEX Crude Oil Technical Levels

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Capped Below 5-day Moving Average

RES 4: $62.23 Daily high 17 Oct
RES 3: $61.70 23.6% of $56.55 to $78.40
RES 2: $61.25/35 Channel top from 9 Oct & Daily high 9 Nov
RES 1: $59.90 5-day moving average

LAST PRICE: $59.75

SUP 1: $58.88/89 Daily lows 7 & 8 Nov
SUP 2: $58.50 Daily low 6 Nov
SUP 3: $57.70 Daily Bollinger band base
SUP 4: $57.05 Low of current move 31 Oct

Dec Nymex is capped below the 5-day moving average at $59.90 and whilst be,low here, the risk is on move towards $56.50/55, where former is the value of the channel base and latter the YTD low on continuation charts. The daily studies are mixed, with 14-day RSI now beginning to turn lower and DMI still bearish.

Whats going in the market?

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China’s Central Bank is likely to diversify its foreign exchange holdings of more than one tlr USD away from US dollar denominated instruments in favor of gold. This supported further dollar weakness through the Asian session.

AUD and NZD seeing significant sell-off against the JPY. A pick up in volatility should confirm this view medium term.

Strong week for equities, only Nikkei down on growth concerns. Still favor Media and Oil-related stocks. Miners took a big hit friday, so watch the commodities.

FX Update: USD/JPY could touch 116.50 this week

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USD/JPY downside risk greater than upside risk near-term, pair may head for 116.50 this week. FX players gradually pricing in weak Japan 3Q GDP data, so even if data weaker than consensus (Dow Jones poll tips price-adjusted annualized growth of 1.1%), market impact may be limited.

Even after a weak GDP figure, Fukui may still reiterate the BOJ's assessment that the economy is expanding and the BOJ does not need to change its current stance; that could refuel market expectations of rate hike in December.

U.S. CPI, PPI, housing starts this week unlikely to change view that U.S. economic growth slowing, inflation tame, Its Possible dollar/yen will keep its weak tone this week.

FX Update: Japan MoF's Fujii Says

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Japan MoF's Fujii says expect private demand-led growth to continue, which should be JPY supportive looking ahead

ECB Speakers Today

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With only second tier data on offer Monday the spotlight falls on ECB speakers with Gonzalez-Paramo (1030 GMT), Trichet (1300 GMT), Liikanen (1530 GMT) and Tumpel-Gugerell (1615 GMT).

Datawise the focus is on UK with Oct PPI input seen -0.4% m-m, +3.9% yr-yr, output +0.1% mo-mo, +1.9% yr-yr with core output +0.1% mo-mo, +2.2% yr-yr (0930 GMT).

Gold Update

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Gold trades in tight ranges, with little volume seen in Asian trading, Long positions still remain heavily in the market, with focus to clear 640/642 levels.
With a good long term outlook for bullish run, supporting by USD weakness and Crude Oil rally, the market is an Up-trend.
Gold current Intra-Day support lies around 625/626 levels and 622
It appears as gold is preparing for NY/European traders to push the prices upwards, giving them chance to Buy at Dips, at 628/629 levels.
With China news up at the front, Precious Metals gets enough support.
No US Economic Activity today, we shall see tight ranges in the market.

Sunday, November 12, 2006

China Update

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China Govts National Development and reform Commission think tank comment "China should actively manage and diversify its foreign exchange reserves so as to increase its returns," published in China Securities Journal Monday.
This added to pressure on the weakness of Dollar.

CHINA Update

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China's Central Banks is likely to diversify its foreign exchange holdings of more than one trillion USD, away from US Dollar denominated instruments in favor of gold.

Friday, November 10, 2006

Precious Metals FUTURES Update

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Gold Futures gently consolidating towards 629/632 but still on solid ground after yesterdays massive move.
Market is convinced we are going higher and is on a buy on dip mentality.
Resistance at 637/8 if broken up 642 could stop momentary the Market.

Silver Futures tested support at $12.93 if it hold 13.40 next, otherwise 12.50/60 solid support

Fed Bernake Text

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Fed's Bernanke's text says Fed is still looking at the monetary
aggregates despite measurement problems. This speech is a history lesson and is not really about current Fed policy. It is titled "History of Monetary Aggregates at the Federal Reserve" and it is being presented via satellite (Bernanke remains in Wash. D.C.) to the European Central
Bank Conference in Frankfurt, Germany. There will be a "controlled Q&A" later.

USD Falls on China Fears - JPY Helped by Fukui

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The USD is lower as more talk of China diversifying its USD1 trillion of reserves.

The JPY is helped by a warning from Bank of Japan Governor Toshihiko Fukui about the risks of a snap back in carry trades. But an unexpected fall in Japanese machinery orders helps to keep a lid on JPY gains.

The USD is down at Y117.36 as the EUR climbs to $1.2881, helped by European Central Bank board member Lorenzo Bini Smaghi's comment that rates are too accommodating in the euro zone. The GBP rises to $1.9146.

FOREX EUROPE UPDATE - USD

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This morning the US dollar has traded in a 1.2827-1.2869 range against the EUR and a 117.36-117.94 range against the JPY in Asia. The dollar has continued to fall after University of Michigan consumer confidence came out weaker than expected yesterday and PBoC Governor Zhou said at the ECB's monetary policymaking conference that China had a clear plan about diversifying its reserves.

With the greenback unable to benefit from better trade and weekly jobless claims data yesterday, it has become clear that the market is still long dollars after the EUR managed to hold its downside support at 1.25 last month. We remains medium-term bears on the dollar, where EUR is looking to aim for 1.30 again in 2-3 months.

Today there are no data releases in the US. The main event to watch is the second day of the ECB conference on monetary policymaking with ECB President Trichet, FOMC Chairman Bernanke, BoJ deputy Governor Iwata and PBoC Governor Zhou speaking on a panel discussion at 1345GMT on the role of monetary policy.

Crude Oil to go higher with other Commodities

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Extended rally from weak inventories Wednesday pushed the market through main resistance areas… Higher levels to come… buy on dips towards 60.50 – 60.05. Target 61.80, 62.75 @ 64.50

Market Buzz

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SEK breaking key resistance yesterday. NOK will do the same today after the CPI figures. USD looks weak, probably in for a 1-1.5 percent downside from here.

Commodities: Precious metals are doing fine, Crude Oil is being bought (another reason for NOK strength). Basic materials should also do well.

Stocks: Miners and explorers are unaffected by US slowdown. Chinese capital (CB reserves) in search of commodity plays?

Fixed Income rangebound, short-term, but sell when it gets close to the previous highs.

Thursday, November 09, 2006

China Zhou Update

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China's Zhou says no plans to speed up diversification. Says no plans to sell USD and no change in diversification policy.

Gold Trade Tip

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Gold short-term has receded into a narrow range.
Buy Break 635.90, stop 631.10, Target 640.07
Sell Break 631.10, stop 635.90, Target 627

However, Market is Dollar bearish, and with Crude Oil rising up with a nice rally.

NYMEX Crude Oil in Rally

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NYMEX December light sweet crude oil futures settled at $61.16 per barrel, up from
Wednesday's settlement at $59.83. Oil's recent trading action suggests further gains are likely from here. There is good resistance in the $61.79/$62.17 range. Above here would target at least $64-$65.75 with an outside chance of a move as
high as $67.20/$67.40.

This Rally Is Helping Precious Metals, And due to China News, and USD weakness, we
are Upto for a nice rally. If you see our analysis starting of the week, we
Analyised Crude Oil to Push higher this week, which is what we are seeing yet
today, with a nice Buying interests flowing in.

Gold Flying Upwards - After China's CB Comments

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Gold is flying in the wake of China CB head Zhou's comments about diversifying reserves into other instruments. Spot gold trades at $632.70/oz at the day's high and up from an o/n low of $615.75. Wed'stumble below $617/$618 prompted many speculative accounts to exit their longs.

Now, with gold breaking above recent highs at $628/$629, specs may be scrambling once again - this time to get back into a long. The next topside target is the Sept highs around $640.00

USD gets hurts by comments from CHINA

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The USD is getting hurt by the comments calling for more diversification of PBOC FX Reserves.

Some talk about asset classes... meaning they could buy other fixed income than US, Perhaps diversify into more non-traditional assets like commodities or commodity properties (we have seen some indication for this in 2006) or just other currencies than USD. Market unsure, but USD negative...

CHINA : CLEAR PLANS TO DIVERSIFY RESERVES

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CHINA CENBANK CHIEF ZHOU SAYS CHINA HAS A VERY CLEAR PLAN TO DIVERSIFY RESERVES.

PUSHING GOLD UP
DROPPING DOLLAR

Crude Oil Ralies after EIA Natural Gas Storage Data

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WTI Nymex crude oil rises to $61.23 after EIA natural gas storage data came in lower than expected at -7 Bcf vs forecast of -5 Bcf.

Low Michigan Hurts USD

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Low Michigan Sentiment components are hurting the USD across the board.
EUR/USD offers found at 1.2805/15 as yesterday where also öfficial"names were seen sellers - 1.2830 is key resistance.

US Data out

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Wholesale inventories out 0.8% vs 0.5% Expected
U. Of Michigan Confidence out at 92.3 vs 93.6 expected

Crude Oil Update - Rallies upwards

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WTI Oil is with a bullish tone after breaking the $60.40 resistance acting as solid support,
now trading close to 61.00 resistance.
Next target is $62.00 zone if broken up could trigger a relief rally towards $64.00/65.00

Such Rally is Helping the Precious Metals.
However we saw some New Investment coming in from Big Fund managers as well.

10 minutes US Economic Data coming out

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In 10 Minutes at 15:00 GMTwe have Wholesale Inventories Expected: 0.5% and U. of Michigan Confidence Expected: 93.6.
Important Economic Data.

Greenspan giving Speech

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Mr Greenspan is giving a speech in Boston, calling the US econ slowdown temporary and suggesting jobs and incomes are doing well

Marker choppy after US Figures

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Market reacted little choppy after the US Figures which were out, favoring support for USD, Market focuses for Wholesale Inventories and U.of Michigan Confidence.
Precious Metal rallies off as NY opens, emerging new buying Pressure. If Market closes Above 627 level, we could see the Next Push upwards again.
However, our Main focus still remains on reaction towards USD and Crude Oil Movement, technically gold is much better, and gradually consolidating, forming another Upward Channel.

Await for the Upcoming Economic Indicator at 15:00 GMT

Wednesday, November 08, 2006

Crude Oil Strengthen - Helps Precious Metals

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Crude Oil Pushing higher in Asia trading Session after larger-than-expected fall in US Stocks of heating oil and distillates.
Such push upwards is helping the momentum of Precious Metals.
Market shall focus on todays Economic Indicator, which is the Key for the moment.

FOREX ASIA UPDATE - USD

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With the bulk of the uncertainty over the election outcome having passed, the USD was able to retrace recent weakness overnight, with EURUSD trading down to a low of 1.2746 from 1.2795.

The Democrats have secured control of the House and are inching closer to control of the Senate, with the balance depending on the outcome in Virginia. Orthodox opinion is that Democratic control of one or both houses of Congress is marginally USD-negative given concerns about trade and currency policy and headline risk from likely hearings on a range of topics.

However, the impact is likely to be mitigated by limits on what the Democrats can accomplish with a narrow majority and the centrist/conservative leanings of many of the newly elected Democratic legislators, and we do not expect a significant dollar selloff on this news, even if victory is also declared in the Senate. Of course in the coming months, energy markets could question the US's commitment to maintaining stability in Iraq, and higher oil prices due to supply concerns would be detrimental to the USD given the more mature stage of the US business cycle relative to Europe and Japan.

Of much greater concern for the USD is a further deterioration in US yields this week amid heightened focus in the press on housing market woes. At the same time, carry trades have suffered in the wake of hawkish comments from BOJ Governor Fukui on Tuesday and acknowledgement of carry trade activity by BOJ board member Mizuno yesterday, despite relatively little reaction in Japanese rates.

Todays Economic Indicator - the monthly trade balance is due at 1330 GMT and the market expects a reduction in the deficit to US$66 bln in September from US$69.9 bln in August. Perhaps of greater interest though will be the Uni of Michigan consumer sentiment index for November, where consensus is for an unchanged reading of 93.6.

Gold Update

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The technical picture is bearish short term. The upward trend channel is broken (8 hour chart) and technically a fall to 605-608 level is very likely. The market feels that the political changes in the US from a more ägressive"foreign policy to a more "defensive" one, might also act heavy on Gold.

However long term, we are still aiming to cross 631 levels, and upward high, The market reacted heavily, after Bush Live Speech, and commenting on Rumsfeld resignation, toning the Picture a Little Defensive of Foreign Policy, However, Tommorrows Economic Indicator is still Awaited.Where we have Some Important figures coming out, which could Change the Whole picture. Intital Jobless Claims, Wholesale Inventories and few others.


We should also take this as a Correction for Long term, and such Impact shouldnt be much Panicky for the moment, but emerging new buying Opportunities. It was Important for this Consolidation to appear on the charts, for the Upward momentum to carry on and build along well.

We Focus tightly on Crude Oil and USD Movement

Gold Update

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Gold came lower significantly on news that Rumsfeld may resign and stops triggered below 620.00, currently 616.30

US Politics : Pres Bush Live

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Pres Bush is making his speech, says he shares blame for the Rep. defeat and will work with the new Congress.

Cannot accept defeat in Iraq, but confirms Rumsfeld is resigning.

Crude Oil Inventories out

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Crude Oil at 435K vs 750K expected
Gasoline out at -584K vs 0K expected
Distillate out at -2675K vs -800K expected
Refinery Utilization out at -0.81% vs 0.50% expected

Market Update

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Market Awaits for today Crude Oil Inventory,
Rally for Crude Oil shall help the precious Metals.
Dollar weakness remains on the board, with EUR/USD aiming for 1.2800
We are also seeing reaction from European Traders, they are booking profits as well as new funds being entered in Precious Metal, market waits for NY to open to see its reaction, on the 1st day after elections.

NYMEX Crude Oil Technical Levels

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NYMEX LIGHT SWEET CRUDE: Holds Above 21-Day Mooving Average

RES 4: $61.71/79 23.6% of $56.55 to $78.40, daily high 26 October
RES 3: $61.25 Current top of daily Bollinger band
RES 2: $60.80 Resistance line 28 Sep
RES 1: $60.54/56 Daily highs 17 Oct, 6 Nov

CURRENT LEVEL: 59.03

SUP 1: $58.90/00 5 and 21-day moving averages
SUP 2: $58.48/50 Minor support line 20 Oct and low 6 Nov
SUP 3: $57.22 Daily low 12 October
SUP 4: $57.05 Daily low 31 October

The market is holding over the 21-day moving average but is struggling to sustain a break of the declining trend from 9 August.

Market Update

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Mid-term elections in the US: The senate is up for grabs (at least a 50-50 chance for the Democrats), but the Democrats are winning the House big-time.

Fixed Income going higher, discounting better fiscal disciplin with the Democrats being able to block some of the planned growth in government expenditures.

Stocks edging higher. US looking to make new highs.

Crude Oil sold off yesterday. Soon looks like a good entry point on the long side (again).

Tuesday, November 07, 2006

US Elections Update

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The first exit polls will come at 23:00 GMT, when Indiana and Kentucky close.
There is at least one key race in Indiana, where Republican Rep Souter is trying to get re-elected. There is also a close race in Kentucky, where Republican Rep. Northup, once considered likely to be relected, is now in a close race

We'll get another few results at 00:00 GMT and 00:30 GMT, then a whole load at 01:00 and 02:00 GMT.
By 04:00 GMT we should know the score unless things are very close in a few key races.

Spot Gold Eyes for 631.95

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Spot Gold has continued to rally following the break of channel resistance last week.

Momentum conditions remain constructive and the positive backdrop provided by these indicators support the bullish set-up that has developed.

Continued gains would pave the way for strength towards 631.95, the 61.8% retracement of the 676.35 to 560.13 decline with the Sep 5 high slightly higher at 640.60. The 76.4% retracement is located at 648.92.

Energy Futures Update

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Yesterday WTI Oil finally broke the $59.40 level and tested the $60.60 resistance -bear channel from end of September-.

Oil advanced appeared to be led by some Heating Oil short covering.

Oil has still to make a daily close above $60.60 to brighten the picture and target 61.80/20 zone first.

Precious Metals FUTURES Update

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Precious Metals consolidated slightly in a lateral way showing the Bull Trend is still well in place.

Gold could be the weakest link of all as Industrial Metals have been performing well through the US Unemployment rate.

Gold Futures stalled at the strong 632.00 resistance. We favor a bit of consolidation towards $618 or $613.5 as Gold is in overbought territory and has created bearish reversal patterns the last two sessions. It's a contertrend call as the Buy on the dips is still is the most rewarding trade.

Funds have been increasing their net long positions in Comex Gold by 8666 contracts to 64716 as reported by the COT a notable change: they have been sellers in the 10 of the 11 preceding weeks.

NYMEX Crude Oil Technical Levels

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NYMEX LIGHT SWEET CRUDE

RES 4: $61.71/79 23.6% of $56.55 to $78.40, daily high 26 October
RES 3: $61.25 Current top of daily Bollinger band
RES 2: $60.91 Resistance line 28 Sep
RES 1: $60.54/56 Daily highs 17 Oct, 6 Nov

CURRENT LEVEL: 60.00

SUP 1: $59.00/15 5 and 21-day moving averages
SUP 2: $57.22/41 Minor daily support and daily low 12 October
SUP 3: $57.05 Daily low 31 October
SUP 4: $56.55 Daily low 20 October, Current base daily Bollinger band

The market recovered over a declining trend from 9 August, negating the moving average cross, while studies are currently neutral.

Market Update

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Fukui out with some quite hawkish comments o/n: “The real effective exchange rate is currently as low as that recorded in the period immediately after the conclusion of the Plaza Accord in 1985”

Mid-term US Elections tonight.

Commodities still doing fine - supported by industrial metals.

Stocks still edging higher – bullish trend channels still intact with a strong bounce off the lower band yesterday.

Monday, November 06, 2006

Forex Asia Update - USD

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The US dollar was weaker across the board despite continued hawkish commentary from Fed's Moscow, with CAD in particular leading the gains.

EURUSD traded up to a high of 1.2726 from 1.2698 while USDJPY traded between 118.20 and 118.46.

US 2 and 10-year Treasury yields nudged down by 2 bp each, reflecting that the market has become very familiar with the Fed's message, while equity markets finished up strongly after three days of continued losses. It's worth noting the complete apathy in the FX markets at present, with EURUSD 3-month implied vols now at all-time lows of or just below 6%, while USDJPY 1-year vols are similarly at record lows.

Chicago Fed President Moskow sounded a hawkish note saying that more rate hikes may be needed. He said growth was expected to average below 3% potential for the next year and that inflation could run above 2% for some time, although core inflation was likely to moderate due to slowing growth. However, his comments were basically consistent with the message we've generally been hearing from Fed officials and the eurodollar curve saw no sustained impact.

Indeed Fed's Pianalto has made similar comments again this morning.

A key focus today will be US mid-term elections, with results likely to come out during the Asian morning tomorrow. Although weekend polls have showed some narrowing, the Democrats are widely expected to take control of the House and possibly the Senate. While we think this would be viewed as moderately USD-negative given market concerns about protectionism and headline risk from hearings, we would not expect a notable knee-jerk reaction.

Today there are no major data events scheduled for the US session.

Gold Update

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Asia is looking for profit taking today, as traders are awaiting for todays results, Panicky traders are booking profits, and getting ready after the election results have come out.
617/619 holds very nice support, And we shall see Gold to rebound at around that levels if we see crossing of 620 level.
Crossing that we shall meet 612/613 which is our Next Main Support.
However, we dont expect a Big dip, as Fundamental, and Crude Oil rally is supporting the precious metals, and we still being in a Very good Bullish triangle, little correction, was ofcourse on the table

Market in very tight range - Awaiting for Tuesday Election results

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Not much activity on currencies, with the market trading in a very tight ranges until the results of Tuesday's midterm congressional elections are known.Traders think that the dollars should improve if the Republicans retain control of the House and Senate, as that would be perceived as creating a harmonious environment for the dollar.

On the Other hand, If the Democrats take control, which is more likely, then the market will see the change as negative for the dollar, as it could create a climate in which it will be difficult to pass legislation.

Crude Oil Update

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Crude Oil Update - Nigerian Oil Minister says.....

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Nigerian Oil Minister reported saying in Seoul that OPEC could
consider another round of cuts if over supply continues.

Sunday, November 05, 2006

Gold Update

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Asia doesnt seems to have to place any Profit taking, market awaits for European traders to make reaction.
However, there is still the strength for Gold and Silver to be Pushed upwards, we were having an Aim for gold to pull back slightly at 630/631 levels, where it took place on Friday.

Technically we see Over-Bought Situtations, But we see Solid Support FUNDAMENTALLY, Looking long term we are aiming for a very good BULLISH ride.

FOREX UPDATE - USD

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The US dollar rallied on Friday on the back of the payrolls report, and the gains were evenly distributed against most other major currencies. EURUSD traded to a low of 1.2683 from 1.2795, while USDJPY traded from 116.95 to a high of 118.18. Meanwhile US 2- and 10-year Treasury yields surged by 15 and 12 bp respectively as the market scaled back prospects of Fed easing next year.

Non-farm payrolls for October rose by +92k, less than market expectations of +123k. However, markets focused on an upward revision to September data, now estimated at a +148k gain, versus the earlier estimate of +51k. Also, the unemployment rate dipped to 4.4% from 4.6% in September, and is now at its lowest level since May 2001.

Also, the non-manufacturing ISM for October came in firm at 57.1, versus expectations for 54.9 and well above September's 52.9.

The US goes to the polls on Tuesday and the markets will keep an eye on the results, with Democrats expected to capture control of the House and potentially take the Senate as well.

While we think this would be viewed as moderately USD-negative due to concerns about less progress on free trade and headline risk from high profile hearings, the impact should be marginal and we would not expect a big knee-jerk reaction to the results.

On the US data front, September trade data due Thursday will be of interest, and we expect some moderation from August's record deficit, largely due to lower oil prices.
With the strong payroll report last Friday making markets unlikely to price near-term Fed easing, and the carry trade environment looking healthy, we see scope for the US dollar to trade well in the near term.

Todays Economic Activity Chicago Fed President Moskow speaks on the US economic outlook at 1345 GMT. There are no major US economic releases scheduled.

Friday, November 03, 2006

Silver Technical OutLook

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Although silver is approaching overbought territory where the risk of a corrective setback becomes more acute, as yet, there is no evidence of waning upside momentum following this week's break of trend-line resistance originating from May at 12.299.

Accordingly, we anticipate further upside towards 13.250, the reaction high from Sep 5. A break of this level would expose 13.390, May 30 corrective peak, but with scope longer-term for an extension towards 13.878, the 76.4% retracement of the 15.240 to 9.470 advance.

Near-term support resides at Thursday's 12.350 low, but minimally it would take a relapse below 11.965, the floor from Oct 31 to jeopardise the ongoing bullish theme.

Retain a positive bias for now, expecting a move towards 13.250. Weakness below 12.350 would be necessary to threaten the immediate up-trend, with a loss of 11.965 required to undermine it.

Gold Detailed Information

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Normally a $10/oz move in gold would capture all the headlines, but gold was outshone by platinum yesterday.
Speculative and investment interest drove the yellow metal's move, with strong buying evident on both futures exchanges and via the US-listed GLD ETF.

Flows in the spot market were remarkably light: certainly physical demand was minimal. An imprompt meeting with more than half of the members of the Bombay Bullion Association in their offices in Mumbai last night suggests demand has slowed with the recent price increase, and will shudder to a halt following Thursday's move.

Gold halted just short of $625/oz where option barriers were believed to lie. But when this level was breached, there was little follow-through, although the metal did close at the high on Comex, before drifting a couple of dollars lower in electronic trade.

The absence of the Tocom market today due to a holiday has left gold quiet in Asia and this should continue until the release of non-farm payrolls at 1330 GMT.

Thereafter, the short-term direction of gold will probably be determined by moves in the dollar, but as long as the metal holds $610/oz into the end of the week, further gains are likely. Silver mimicked gold's moves, although relatively quietly.

As in gold, our ETF traders note renewed interest in the last few days, mostly on the buying side.

Market Buzz

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US Nonfarm Payrolls and Unemployment Rate in focus today. Also watch out for ISM Non-Manufacturing.

Downside in USD TWI limited for now. Could be a reversal day. 1.28 in EURUSD is key.

Stocks about to break lower band of the bull channels from mid-2006. Could todays labor data be the trigger for a break lower?

Energies looking extremely attractive at these low prices and US mid-term elections soon out of the way.

Thursday, November 02, 2006

Gold Update

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Gold Spot had a good Bull Run Achieving 7 days of consecutive higher close.
But we like to note that gold had never achieved 8 days of consecutive higher or lower close since year 2002.
Yesterday closed were 617.32, any levels about that ought to be a good sell.
We are looking for Profit taking to Happen on Friday, as being a week END.
Sell Break at 623.50, Stops (IF DONE) at 626.03 with target 614.10

US Data out

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Non Farm Productivity out at 0.0% vs 1.0% Expected
Continuing Claims out at 2415K vs 2441K Expected
Initial Jobless Claims out at 327K vs 310K Expected
Unit Labor Costs out at 3.8% vs 3.4% Expected

ECB Trichet to give Speech in 5 minutes

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In 5 minutes ECB Trichet gives his speech that accompanies the rate decision.

Some talk of less hawkishness has been heard earlier in the week but above all, it'll be interesting to hear just how concerned he is about inflation in the Euro-Zone.

EUR is broadly higher today and Equities are beginning to ease following this mornings bounce.

ECB Rate Decision Out

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ECB Rate Decision Out 3.25 as Expected

ECB Meeting today - Euro Update

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While today's ECB meeting (1245 GMT) is unlikely to see a lift in the reference rate from 3.25%, markets continue to price a more aggressive tightening scenario heading into next year. Indeed, though no economists polled by Bloomberg expect a rate rise today, the general market consensus is for a stronger policy statement and press conference signalling further tightening ahead.

We agree, expecting today's policy statement and subsequent Trichet press conference (1330 GMT) to re-emphasise his policy "vigilance" with respect to rising inflation. However with euribor implied yields still hovering around 3.7%, we question such comments' ability to lift the euro.

Wednesday, November 01, 2006

FOREX ASIA UPDATE - USD

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The US dollar managed to hold steady overnight despite a deterioration in the manufacturing ISM adding to the general outlook for slowing US growth, and EURUSD traded in a 1.2746 to 1.2799 range while USDJPY traded 116.57 to 117.17.

US 2 and 10-year Treasury yields fell by a further 3 and 5 bp respectively although Eurozone yields managed to fall by a similar magnitude yesterday.

The manufacturing ISM fell to 51.2 in Oct from 52.9, while the prices paid index dropped to 47.0 from 61.0, and is now signalling falling prices.

Meanwhile, the ADP national employment report showed an estimate for 128k in jobs to be added in October versus 78k, higher than market expectations of 108k in jobs. Since mid-October, the USD has declined broadly in line with a deterioration in 2-year yield spreads over other G10 currencies.

With this week's key Japan event risks having passed yesterday with no significant impact on Japanese yields and BOJ expectations, the carry environment appears poised to remain healthy in the near-term, which should also support the USD.

Todays Data - unit labour costs are due at 1330 GMT as are the weekly jobless claims, and factory orders are due at 1500 GMT. Fed President Fisher speaks at 1700 GMT, but the topic does not seem conducive to market moving comments.

Gold Update

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Gold is ending the session near the highs just below 620 level.
If we can clear this area tommorrow the channel is open towards 642 levels.

Support is now seens at 609/610 and at 598.

Gold Update

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Gold Did profit take and bounced at 611, where we were aiming at.
However gold is pushing upwards towards 620, It should consolidate reaching 625 levels, As technically we are seeing Over-Bought, should appear a little correct, and rallying off to 645 Levels.

Gold Update

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We Expect little profit taking to happen in Gold, as Technically its Over-bought, a little dip shall arise, and then a Rally Again.

CRUDE OIL DATA WILL HELP PRECIOUS METALS

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Energy Inventories are Out
Crude Oil out at 1910K vs 2600K expected
Gasoline out at -2799K vs 925K expected
Distillate out at -2723K vs -1175K expected
Refinery Utilization out at 2.72% vs 0.73%

Crude Oil Rally will help Precious Metals.

Data Reaction

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Weaker than expected ISM gives the dollar shove lower, other data about in-line.
Stocks pare gains, Tsys lift to new highs.

SLAM ON DOLLAR - ECONOMIC DATA OUT

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ISM Manufacturing out at 51.2 vs 53.0 Expected
ISM prices Paid out at 47.0 vs 58.0 Expected

EUR/USD Spiking near to 1.2792.

Precious Metals following the lead.

Comex Gold futures pushing higher.

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Comex gold futures are sharply higher as funds appear to be aggressive buyers after the Dec contract passes resistance at the $616 an ounce level.

The funds keep buying and we are seeing a technical break out on the charts even though oil is lower and the dollar is higher.

Dec gold is up $10.10 at $616.90 an ounce

Gold Update - Crossed the Barrier

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Gold has crossed the Barriers 611, and has formed a new triangle now, it shall be meeting 645-650 levels very soon.
However, do expect mini correction, as gold has contiuned its fly around 7 days, so we shall expect slight profit taking in between, however its now UPTREND.

Market is awaiting for todays data - ISM Manufacturing, important Economic Data.
As well as we have Energy Datas coming out today, which will set Short term the prices in Crude Oil, which will in reflect affect Precious Metals.

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