$ US Dollar Finds Support in Haven Demand as Stock Markets Slump

US Dollar wrinkles Haven Demand Higher as Stocks Slump in Asian Trade Soft Eurozone PPI Print May Pressure Euro on ECB Policy Easing Bets Markets Highly Sensitive to QE3 Cues with US Factory Orders on Tap The US Dollar (ticker: USDollar) advanced overnight as Asian stocks declined, boosting demand for the go - to haven currency. The MSCI Asia Pacific regional benchmark equity index fell 2.2 percent, with markets reacting to Friday's deeply disappointing US employment report. The US is a crucial market for Asian exporters and the sub - by jobs growth reading weighed on future demand and earnings expectations. China's Non-Manufacturing PMI reading released over the weekend compounded selling pressure, showing service-sector activity slowed to the weakest in at least 14 months. The stock-linked Australian and New Zealand Dollars boron the brunt of the selloff in the FX space.
Looking ahead, S & P 500 stock index future are pointing sharply lower, hinting at continued risk aversion that stands to keep the greenback well-supported against most of its leading counterparts. Eurozone PPI figures headline the economic calendar, with expectations calling for wholesale inflation to print at 25-month low of 2.7 percent. The outcome may compound downward pressure on the Euro ahead of Wednesday's ECB policy meeting amid speculation that slumping growth and easing price pressure in the pipeline may allow Mario Draghi and company to boost stimulus efforts.
Later in the day, the spotlight shifts to US Factory Orders figures. Economists' forecasts point to an increase of 0.2 percent in April following a sharp 1.9 percent decline in March. A print in line with expectations is unlikely to prove particularly market-moving in that it would do little to disrupt the overall down trend carved out over the past two years. A disappointing outcome may spark some fireworks however considering markets' likely sensitivity to soft US data releases in the context of QE3 speculation. This means a particularly soft print may see the greenback pressured, particularly against the Japanese Yen and gold.
Asia Session: What Happened
China Non-manufacturing PMI (MAY)
TD Securities Inflation (MoM) (MAY)
TD Securities Inflation (YoY) (MAY)
Company Operating Profit (QoQ) (1Q)
ANZ Job Advertisements (MoM) (MAY)
Euro Session: What to Expect
Euro-Zone Sentix Investor Confidence (JUN)
Euro-Zone Producer Price Index (MoM) (APR)
Euro-Zone Producer Price Index (YoY) (APR)
France to Sell 84-357 Day Bills
Critical Levels

$ Dollar and ¥en Rise on Haven Demand, Aussie Sold as PPI Disappoints

Talking Points
Eurozone PMIs to Show Manufacturing, Services Sectors Shrank for Third Month US Dollar, Japanese Yen Advance on Safe-Haven Demand as Stocks Decline in Asia Australian Dollar Sold After PPI Misses Expectations, Stoking RBA Rate Cut Bets The preliminary set of April's Eurozone PMI readings headlines the calendar in Europe. Economists' median forecasts suggest the region-wide composite reading will print at 49.3, yielding the third-consecutive print below the 50 "boom-bust" threshold and reflecting continued contraction in manufacturing-and service-sector growth. The pace of decline is expected to moderate a bit compared with the 49.1 result recorded in March.
With the outlook for global economic growth in focus as traders size up the ability of a choppy recovery in the US offset to a recession in the currency bloc and slowdown in China, traders' response to the release ought to be relatively straight-forward. An upside surprise above the "50" threshold is likely to prove supportive for the Euro as well as risk appetite at large, while a disappointing one can be expected to have the opposite effect. Indeed, in the latter scenario would imply stronger headwinds to world output as well as greater scope for future ECB policy easing.
The Japanese Yen and US Dollar outperformed in overnight trade as stocks declined, boosting demand for the go - to safe haven currencies. The MSCI Asia Pacific regional benchmark equity index slid 0.4 percent. The HSBC China Manufacturing PMI gauge printed at 49.1 in April, showing the factory sector shrank for the sixth consecutive month (albeit at a slower pace than in March).
The Australian Dollar boron the brunt of the selloff after first - quarter Producer Price Index figures disappointed, showing wholesale inflation slowed to an annual pace of 1.4 percent. The result marked the weakest reading since the second quarter of 2010 and reinforced expectations calling for the RBA to cut interest rates in May. The markets now price in a 94 percent probability of a 25bps reduction in headline borrowing costs (according to data compiled by Credit Switzerland).
Asia Session: What Happened
Producer Price Index (QoQ) (1Q)
Producer Price Index (YoY) (1 Q)
Flash HSBC China Manufacturing PMI (APR)
Euro Session: What to Expect
French Own-Company Production Outlook (APR)
French Production Outlook Indicator (APR)
French Business Confidence Indicator (APR)
Real Estate Index Family Homes (1 Q)
French PMI Manufacturing (APR P)
German PMI Manufacturing (APR has)
Euro-Zone PMI Composite (APR has)
Euro-Zone PMI Manufacturing (APR has)
Euro-Zone PMI Services (APR has)
Euro-Zone Government Debt/GDP Ratio (2011)
Critical Levels

OpenBook’s Oil Traders Wait for Demand, Prices to Heat Up

February 7th, 12:56 pm
WTI crude oil prices rose above $97 per barrel earlier, the result of two key factors. First, a prolonged cold snap in Europe has boosted demand for heating oil and second, an executive order was signed yesterday by U.S. President Barack Obama, which effectively freezes Iranian assets, a move which is certain to ratchet up the animosity between Iran and the U.S.
OpenBook traders are certain that the price of oil will continue to rise, and sentiment as of this writing is almost exclusively bullish with 54 buyers and two sellers. Over the past day, as oil prices edged up to a 6-month high, OpenBook traders with long positions booked their profits. Trader XenderX, who allocates 23% of the portfolio to oil, closed out one long yesterday with a 19% return and has two open longs with targets of 99.00 and 100.00. Over the past quarter, this trader’s oil positions have returned an average 16%.
Trader vkhetan also closed out four longs in the past 24-hours, reaping profits between 7.27% and 11.82%. This trader, who allocates 24% to oil, is working to achieve his first recorded gain, and is on track to show an 84% weekly return. Two open long positions are targeting 97.76 and 98.97.
Iran’s intentions for its nuclear program have been called into question, and the U.S. and some European nations have tightened sanctions on the government to halt hard currency inflows that could be used to further the program. While Iran is not a major oil supplier to the U.S., some E.U. members – including Greece and Italy – rely heavily on Iranian oil. More worrying, the Iranian government has the ability to disrupt the oil supply chain from other Arab producers, by strategically blocking delivery in the Strait of Hormuz.