Products sold as eurozone PMIS cloud the prospects for global growth

Do not have a FXCM account?

Or

Do not have a FXCM account?

Or

Follow us

Ilya Spivak, currency 21 June 2012 strategist 09: 22 GMT Talking Points

Oil crude, copper follow low Stocks on PMI for the eurozone Soft Gold and silver reports sold as Fed holds IS3, Dollar Gains on Haven flows product prices are traded significantly lower in European trade initially, mirroring of a bond through grants from the region. The rout follows a game dismal figures of PMI for the eurozone, where the regional composite gauge shows (as expected) that manufacturing and the services sector declined at the fastest pace in three years. Signs of deepening recession in the currency bloc are weighing on the appetite of risk given that the decline represents face largest wind of the world this year.

Crude oil and copper prices are naturally less given the sensitivity of the two products to global growth trends. Gold and silver in the same way in the red as the austere atmosphere stokes haven demand for the US Dollar, apply de facto pressure downward. Announcement of the policy of yesterday FOMC is amplify condemnation of sellers after Ben Bernanke and company has opted for not to launch a third phase of quantitative easing, sinking of the application of precious metals as a cover for inflation.

Future of S & P 500 stock index are markedly lower pointing before the Wall Street opening bell, arguing for more information as well as North American markets are online. Fears of euro-zone debt crisis remains a major Joker however. Euro-zone finance ministers should start a meeting of two days following the completed G20 Summit earlier this week, where policy makers face strong pressure from world leaders to strengthen the efforts of crisis containment.Concrete initiatives tend to wait the week next to the Summit of the leaders of the EU, but traders will nevertheless pay attention to marginalize the comments of the first signs.

Spain is also expected on the results of an audit for a label of price of recapitalisation sector of banking in the country. More than €100 billion - or uncomfortably upper limit of rescue Madrid obtained last week - is likely to stir up the risk aversion. Results of a sale auction bond offer 2014, 2015 and 2017 paper today will be an instant impact barometer, with a cover of particularly low or average yields offers cover readings that may exacerbate the pressure on risky assets.

Crude oil WTI (near NY): $81.45 / /-2.90 / /-3.44%

Prices are tested under the Fibonacci 23.6% 81.07 expansionat, with a smaller break on a daily basis of closing exposing the 38.2% level to 77,34. For the moment, the resistance in the short term remains 87.00 figure, marked by high June 7.

Daily chart - created with FXCM Marketscope 2.0

Spot Gold (near NY): $1607.48 / /-11.05 / / 0.68%

Prices reversed lower resistance to 1637.35, the tracing of Fibonacci 76.4%, after having placed in a bearish Hanging Man candlestick. Vendors are now testing the figure of 1600/oz, a barrier reinforced by the 50% Fib, with a pause in exposing the level of 38.2% to 1582.10. The tracing of 61.8% to 1616.23 is now the resistance in the short term.

Daily chart - created with FXCM Marketscope 2.0

Cash (near NY): $28.16 / /-0.27 / / 0.93%

Price completed a bearish continuation flag graphic, exhibitor 27.06 as the next objective of disadvantage. The first layer of 29.71 place important resistance lines, but the training involves a measured goal disadvantage in 26.46. The bottom of the flag, now at 28.45 was reconfigured as short term resistance.

Daily chart - created with FXCM Marketscope 2.0

COMEX E-Mini Copper (near NY): $3.388 / /-0.046 / /-1.34%

Prices broke back below the tracing of 23.6% Fibonacci 3.384 to complete a pattern of candlestick bearish engulfing, referring to other upcoming losses. Initial support aligns to 3.296, 23.6% expansion Fib, with a break in this exhibition support Triple Bottom to 3.250. 3.384 Level is now short term resistance.

Daily chart - created with FXCM Marketscope 2.0

-Written by Ilya Spivak, currency for Dailyfx.com strategist

Contact Ilya, e-mail ispivak@dailyfx.com. Follow Ilya on Twitter at @ IlyaSpivak

To be added to the list of electronic distribution of Ilya, send a note with the subject line "Distribution List" to ispivak@dailyfx.com

DailyFX provides news forex and technical analysis on trends affecting the global currency.
Learn forex trading with a free account for practice and exchange of FXCM charts.

June 21, 2012 09: 22 GMT

/ / SET the properties on the PAGE var sProperties = new Object(); sProperties.server = "2.6". sProperties.channel = ' basic: product; / / Pass the properties on the page to Omniture if (typeof sProperties! = "undefined") {for (var sProperty in sProperties) {s [sProperty] = sProperties [sProperty];}} var s_code = ne. (); If (s_code) document.write (s_code);

View the original article here

{ Eurozone Needs Healthy "Proponomics" Application to Survive Crisis}

06 June 2012 06:02 GMT Markets finding some bids following excessive risk liquidation Aussie growth data come in much better than expected We introduce “Proponomics” - the economics of artificially propping economies Eurozone must apply this strategy to prevent further collapse ECB policy decision due later today; no rate change expected It’s excellent to be back on the desk after some time off to enjoy my new baby boy.
Meanwhile, markets have settled following a wave of volatility resulting in broad based strength in the safe haven US Dollar and Yen. While there is still no clear resolution in place to deal with the Eurozone crisis, a simple need for some form of a technical bounce after some extreme moves is finally being recognized. At the same time, there are also some positives to talk about on the fundamental front, with the most recent much better than expected Aussie growth data perhaps helping to infuse a sense of confidence into the market place.
Broadly speaking, we contend that risk correlated assets could indeed find more demand over the coming weeks, even in the face of threats in the Eurozone and fear of contagion. Since the onset of the global crisis in 2008, there has been one constant that continues to support the markets at every step of misfortune, and that is the commitment by central banks and governments to step in and do whatever is necessary to prop the local economy. This approach of doing “whatever it takes” to prevent collapse and prop up struggling economies is a new form of economics that seems to be proving effective as evidenced by the ability for the US economy to slowly emerge from recession.
What better name for this form of economics then “proponomics,” the economics of pumping liquidity into the system to prevent collapse at all costs. The strategy doesn’t concern itself with longer-term threats to the local and global economy and instead focuses firmly on fixing the short-term problem. While it is clear that the risks to the longer-term economy are potentially exacerbated through the implementation of an artificial support to the economy, it is also true that inability to step in and deal with the short-term problem would be even worse than pumping the local economy with liquidity and keeping monetary policy ultra accommodative.
Right now, the short-term threat to the Eurozone economy is more significant than the longer-term one and proponomics seems to be the most effective strategy. It now looks as though Europe will need to step up on this front and overinflate its way through the turmoil in order to prevent what could be a very serious disaster. Therefore, if Eurozone officials can step up and offer some form of reassurance that they will do whatever necessary to keep the Eurozone intact, we feel the outlook will be brighter despite the many obstacles that will still need to be overcome. The European Central Bank is scheduled to meet later today and while no change is expected on rates, we view this as a formidable opportunity for Mr. Draghi to step up and provide the necessary reassurances to both the Eurozone and global economies.
ECONOMIC CALENDAR
TECHNICAL OUTLOOK

EUR/USD:The market is in the process of correcting from some violently oversold levels after breaking to yearly lows just under 1.2300. While our overall outlook remains grossly bearish, from here, we still see room for short-term upside before a fresh lower top is sought out. Look for a close back above 1.2545 to open the door for acceleration into the 1.2800-1.3000 area, where fresh offers are likely to re-emerge.

USD/JPY:The latest setbacks have been rather intense, with the market collapsing through the 200-Day SMA before finally finding support by 77.65. We have since seen attempts at recovery and we contend that the market should continue to break higher, with sights ultimately set on a retest and break of the 2012 highs by 84.20 further up. However, at this point, we will need to see a break and close back above 80.00 to officially alleviate downside pressures and reaffirm bullish outlook.

GBP/USD: Daily studies are now well oversold and from here risks seem tilted to the upside to allow for a necessary short-term corrective bounce after setbacks stalled just shy of the 2012 lows from January. Look for a break and close back above 1.5440 to strengthen short-term bullish outlook, with acceleration then projected into the 1.5600-1.5800 area where a fresh lower top will be sought out in favor of underlying bear trend resumption.


USD/CHF: While we retain a broader bullish outlook for this pair, with the market seen establishing back above parity over the coming weeks, shorter-term risks are for more of a corrective pullback to allow for the market to establish a fresh higher low. As such, we see risks for weakness over the coming sessions towards the 0.9300-0.9500 area before the market looks to reassert its bullish momentum and broader uptrend.

: Eurozone Needs "Proponomics" Injection to Help Restore Confidence

Markets finding some bids following excessive risk liquidation Aussie growth data come in much better than expected We introduce “Proponomics” - the economics of artificially propping economies Eurozone must apply this strategy to prevent further collapse ECB policy decision due later today; no rate change expected UK construction PMI, Eurozone GDP marginally weaker than expected German industrial production fall sharply It’s excellent to be back on the desk after some time off to enjoy my new baby boy.
Meanwhile, markets have settled following a wave of volatility resulting in broad based strength in the safe haven US Dollar and Yen. While there is still no clear resolution in place to deal with the Eurozone crisis, a simple need for some form of a technical bounce after some extreme moves is finally being recognized. At the same time, there are also some positives to talk about on the fundamental front, with the most recent much better than expected Aussie growth data perhaps helping to infuse a sense of confidence into the market place.
Broadly speaking, we contend that risk correlated assets could indeed find more demand over the coming weeks, even in the face of threats in the Eurozone and fear of contagion. Since the onset of the global crisis in 2008, there has been one constant that continues to support the markets at every step of misfortune, and that is the commitment by central banks and governments to step in and do whatever is necessary to prop the local economy. This approach of doing “whatever it takes” to prevent collapse and prop up struggling economies is a new form of economics that seems to be proving effective as evidenced by the ability for the US economy to slowly emerge from recession.
Relative performance versus the USD Wednesday (as of 10:05GMT)
AUD +1.13%
NZD +0.89%
GBP +0.53%
CAD +0.47%
EUR +0.34%
CHF +0.32%
JPY -0.43%
What better name for this form of economics then “proponomics,” the economics of pumping liquidity into the system to prevent collapse at all costs. The strategy doesn’t concern itself with longer-term threats to the local and global economy and instead focuses firmly on fixing the short-term problem. While it is clear that the risks to the longer-term economy are potentially exacerbated through the implementation of an artificial support to the economy, it is also true that inability to step in and deal with the short-term problem would be even worse than pumping the local economy with liquidity and keeping monetary policy ultra accommodative.
Right now, the short-term threat to the Eurozone economy is more significant than the longer-term one and proponomics seems to be the most effective strategy. It now looks as though Europe will need to step up on this front and overinflate its way through the turmoil in order to prevent what could be a very serious disaster. Therefore, if Eurozone officials can step up and offer some form of reassurance that they will do whatever necessary to keep the Eurozone intact, we feel the outlook will be brighter despite the many obstacles that will still need to be overcome. The European Central Bank is scheduled to meet later today and while no change is expected on rates, we view this as a formidable opportunity for Mr. Draghi to step up and provide the necessary reassurances to both the Eurozone and global economies.
ECONOMIC CALENDAR

TECHNICAL OUTLOOK

EUR/USD:The market is in the process of correcting from some violently oversold levels after breaking to yearly lows just under 1.2300. While our overall outlook remains grossly bearish, from here, we still see room for short-term upside before a fresh lower top is sought out. Look for a close back above 1.2545 to open the door for acceleration into the 1.2800-1.3000 area, where fresh offers are likely to re-emerge.

USD/JPY:The latest setbacks have been rather intense, with the market collapsing through the 200-Day SMA before finally finding support by 77.65. We have since seen attempts at recovery and we contend that the market should continue to break higher, with sights ultimately set on a retest and break of the 2012 highs by 84.20 further up. However, at this point, we will need to see a break and close back above 80.00 to officially alleviate downside pressures and reaffirm bullish outlook.

GBP/USD: Daily studies are now well oversold and from here risks seem tilted to the upside to allow for a necessary short-term corrective bounce after setbacks stalled just shy of the 2012 lows from January. Look for a break and close back above 1.5440 to strengthen short-term bullish outlook, with acceleration then projected into the 1.5600-1.5800 area where a fresh lower top will be sought out in favor of underlying bear trend resumption.

USD/CHF: While we retain a broader bullish outlook for this pair, with the market seen establishing back above parity over the coming weeks, shorter-term risks are for more of a corrective pullback to allow for the market to establish a fresh higher low. As such, we see risks for weakness over the coming sessions towards the 0.9300-0.9500 area before the market looks to reassert its bullish momentum and broader uptrend.

Commodities Sold on Eurozone Data purpose QE3 Bets May Spark Bounce

Talking Points
Crude Oil, Copper Hurt by Eurozone Data But May Bounce with ISM Result Gold and Silver May Rise if Another Soft US Data Point Boosts QE3 Outlook Commodity prices are under pressure in European trade as broadly soft economic data out of the Eurozone reminded investors that aside from sovereign risk and structural concerns (at least as it relates to Greece), the region is also sinking deeper into an economic slump that is weighing on global performance at large. Revised Eurozone PMI figures pointed to likely recession in the second quarter while German factory orders and region-wide retail sales figures disappointed expectations. Looking ahead, S&P 500 stock index futures have erased earlier gains and now point firmly lower, hinting continued selling may be ahead.
The landscape may quickly change with the release of the ISM Non-Manufacturing Composite gauge however. Median forecasts call for a print at 53.5 in May, matching April’s result. An outcome in line with expectations is unlikely to spark fireworks but a disappointing result may counter-intuitively boost risk appetite while applying downward pressure on the Dollar in the context of the QE3-driven theme at play this week. That would have scope to boost sentiment-linked crude oil and copper prices while offering a lift to gold and silver as precious metals are once again sought out for their store-of-value appeal.
WTI Crude Oil (NY Close): $83.98 // +0.75 // +0.90%
Prices put in a Hammer candlestick above support at 83.34, the 76.4% Fibonacci retracement, hinting an upswing is ahead. Highly oversold RSI studies reinforce the risk of a rebound. Initial resistance lines up in the 90.14-88.54 area, marked by the early September swing top and the 61.8% Fib. Alternatively, a break lower initially exposes 80.16.

Daily Chart - Created Using FXCM Marketscope 2.0
Spot Gold (NY Close): $1618.85 // -5.25 // -0.32%
Prices are testing resistance at a falling trend line set from early March, now at 1628.65. The barrier is reinforced by the 76.4% Fibonacci retracement at 1637.35, with a break higher exposing the May 1 high at 1671.49. Near-term support lines up at 1616.23, the 61.8% Fib, with a break below that opening the door for a test of the 1600/oz figure.

Daily Chart - Created Using FXCM Marketscope 2.0
Spot Silver (NY Close): $28.25 // -0.27 // -0.93%
Prices are drifting sideways above support at 27.06, with gains still capped at 28.70. A break lower initially exposes the 26.05-15 area. Alternatively, a push higher through resistance opens the door for a challenge of 29.71.

Daily Chart - Created Using FXCM Marketscope 2.0
COMEX E-Mini Copper (NY Close): $3.308 // -0.006 // -0.18%
Prices broke through support at 3.426, the 76.4% Fibonacci retracement, with sellers now testing the double bottom at 3.250. A break below this boundary exposes the 123.6% Fib expansion at 3.080. The 3.426 level has been recast as near-term resistance.

Daily Chart - Created Using FXCM Marketscope 2.0
--- Written by Ilya Spivak, Currency Strategist for Dailyfx.com
To contact Ilya, e-mail ispivak@dailyfx.com. Follow Ilya on Twitter at @IlyaSpivak
To be added to Ilya's e-mail distribution list, send a note with subject line "Distribution List" to ispivak@dailyfx.com

View the original article here

:::: Eurozone Producer Prices Softer than Expected in April

04 June 2012 07:30 GMT THE TAKEAWAY: Producer prices in the Euro area lower than expected in April -> Lower energy costs, deepening economic slump factor into drop -> Euro price action reserved after yesterday’s weakness
Euro-area producer price inflation slowed for the seventh month in a row in April, the EU stats office said today. The softer than expected number was thought to be caused by declining energy costs and a weakening economic situation, highlighted by European leaders’ inability to resolve the Greek issue.
Declining oil prices have eased the burden on beleaguered European manufacturers, sending producer prices down. Meanwhile, plummeting economic confidence and sky-high unemployment rates have raised speculation that the European Central Bank will ease rates at its next policy meeting.


The Euro traded quietly on Monday, well within the weekend range which saw weakness in risk correlated assets. EURUSD hit a fresh yearly low by 1.2286 over the weekend as investors continued to loose confidence in the single currency.

Commodities Rise Despite Dismal Chinese, Eurozone PMIs - Why?

24 May 2012 11:00 GMT Talking Points
Crude Oil, Copper Follow Shares Higher as Risk Appetite Corrects Gold and Silver Find Support on Waning Haven Demand for US Dollar Risk appetite trends appear to be shrugging off softer Chinese and Eurozone PMI figures, with European shares on the upswing and growth-geared crude oil and copper prices following suit. Meanwhile, waning haven demand is pressuring the US Dollar, allowing an upside correction for anti-fiat gold and silver prices. S&P 500 stock index futures have erased earlier losses and now trade firmly in positive territory ahead of the opening bell on Wall Street, reinforcing the likelihood of a recovery across the sentiment landscape as North America comes online.
While the chipper mood is undoubtedly running counter to economic data, recent price action offers context to explain what may be happening. Risky assets have faced unrelenting selling pressure over the past three weeks with very little corrective recovery in the interim. With the EU leaders’ summit in the rearview mirror and growth indicators reinforcing the seriousness of already well-known headwinds facing global output from the Eurozone and China, the supply of near-term negativity that can conceivably strike the markets may be running dry. Broadly speaking, this opens the door for a corrective recovery until the bears find fresh fodder to fuel downward momentum as the second Greek election approaches in mid-June.
The US economic calendar appears broadly supportive of an improving risk appetite profile. Durable Goods Orders are expected to rise in April after a sharp dip in March, the Kansas City Fed manufacturing activity index is forecast to rise in May after two consecutive months of losses, and weekly Jobless Claims numbers are set to yield a modest but broadly positive result. While Initial Claims are expected to hold at 370K for a second week, Continuing Claims are due to edge lower to 3250K.
WTI Crude Oil (NY Close): $89.90 // -1.95 // -2.12%
Prices continue to test resistance-turned-support at 90.49, with a break lower initially exposing the 61.8% Fibonacci retracement level at 88.54. Near-term resistance lines up at 92.51, a former support marked by the December 16 low, with a push above that targeting the February 2 low at 95.41.
Daily Chart - Created Using FXCM Marketscope 2.0
Spot Gold (NY Close): $1561.45 // -7.05 // -0.45%
Prices recoiled from resistance marked by the 1600/oz figure as well as the 50% Fibonacci retracement level at 1599.17, taking out support at 1582.10 marked by the 38.2% level and exposing the next downside objective at 1560.98. A break below this boundary exposes the 1522.50-1532.45 area. The 1582.10 level is acting as resistance.

Daily Chart - Created Using FXCM Marketscope 2.0
Spot Silver (NY Close): $28.18 // -0.29 // -1.00%
Prices are reversing lower from resistance at 28.70, with sellers once again aiming to challenge support at support at 27.06. A break lower exposes the 26.05-15 area. Alternatively, a reversal back through resistance on a daily closing basis targets the next upside barrier at 28.70.
Daily Chart - Created Using FXCM Marketscope 2.0
COMEX E-Mini Copper (NY Close): $3.396 // -0.092 // -2.64%
Prices are testing through support at 3.438, the 100%Fibonacci expansion, with a break below that exposing the 123.6% level at 3.327. Near-term resistance lines up at 3.537, the 76.4% expansion level.
Daily Chart - Created Using FXCM Marketscope 2.0

€ Euro At Risk for Major Drop As Eurozone Crisis Intensifies

23 May 2012 05:12 GMT Fear and uncertainty take hold of markets Price action reminiscent of Bear and Lehman Investors continue to price in probability for Greek exit Euro still eyes retest and break of 2012 low Bank of Japan leaves policy on hold as widely expected There is nothing more poisonous for markets than fear and uncertainty. The ongoing turmoil in the Eurozone has done a good job of fueling this panic. Market participants can hardly think clearly right now and the environment is extremely reminiscent of the environment in the US markets in the early crisis during the Bear Stearns and Lehman collapse. There seems to be a complete lack of confidence in the ability for European leadership to come up with a solution on Greece, and the longer this takes, the more investors will price in the probability of an exit from the Euro. In fact, now it seems as though the question is not whether Greece will exit, rather how messy the exit will be?
The resulting price action has seen resurgence in broad based buying of the US Dollar and Yen on a flight to safety, while risk correlated assets are aggressively sold. Any rebound in the early week following some already aggressive risk selling in recent sessions has already been well offered, and the risks from here continue to be tilted to the downside. In fact, it is actually rather surprising that the Euro has not yet broken down through the yearly lows from January at 1.2625, and once this level is actually taken out, then look out below. The EU Summit later today could inspire some fresh volatility, and we will be watching closely for any positive developments. Still, we recommend that market participants take to the sidelines and patiently wait for the panic and fear to subside.
Elsewhere, the Bank of Japan has come out and left policy on hold as was widely expected. While the central bank did cite ongoing risks to the global economy, perhaps some upbeat comments towards the local economy were poorly mistimed given the escalation in global fear over the past 24 hours and recent Fitch downgrade of Japan. Unfortunately for the administration, this will only add to additional upside pressure on the Yen, which still trades rather close to its record highs against many currencies.
Technically, risk correlated assets are already well oversold on the daily charts, and it will be interesting to see just how stretched these markets can get before any sign of rebound. Aussie and Kiwi have both dropped to fresh multi-day lows against the buck, and yet both of these currencies are already well oversold on the short-term charts. The Euro is also oversold and yet, given the fundamental outlook above, things could still get much uglier. Normally, we might recommend looking to fade the risk off trade, but given just how scary markets are right now, the best place is probably on the sidelines. It is true that there is no money to be made on the sidelines, but sometimes, the best trade is no trade at all.
ECONOMIC CALENDAR

TECHNICAL OUTLOOK

EUR/USD:The market remains under intense pressure and the focus for now is squarely on a retest and break of the 2012 lows from January at 1.2625. While we would not rule out a possibility of a sustained break below this level over the coming sessions, short-term technical studies are correcting from oversold and are showing a need for some form of a bounce from where a fresh lower top is sought out. Ultimately however, any rallies should now be very well capped by previous support turned resistance at 1.3000 in favor of additional weakness over the medium-term that projects deeper setbacks into the lower 1.2000's.

USD/JPY:The market continues to consolidate around 80.00 and is in the process of looking for a medium-term higher low ahead of the next major upside extension back above the yearly highs at 84.20 and towards 90.00 further up. However, for the time being it remains in question whether the market will still head lower towards the 200-Day SMA by 78.50 before ultimately reversing higher. The key level to watch above comes in by 80.60, and a break and close above this level will officially alleviate downside pressures and suggest that a higher low has now been carved in the 79.00's.

GBP/USD:The market remains under intense pressure since breaking back below 1.6000 and setbacks could now extend towards next key support in he 1.5600 area over the coming sessions. Still, daily studies are now stretched and we would prefer looking to sell into rallies towards 1.6000 where a fresh lower top is sought out.

USD/CHF:Overall the structure remains highly constructive and we continue to project additional upside over the coming months back above parity. For now, the latest break and close above 0.9335 is expected to accelerate gains for a retest of the yearly highs by 0.9600, while any intraday pullbacks should be very well supported ahead of 0.9200. Ultimately, only back under 0.9000 would negate outlook and give reason for pause.

-> Gold Outlook Rests on G8 Summit, Eurozone PMIs and US Survey Data

19 May 2012 03:57 GMT

Fundamental Forecast for Gold: Neutral
Gold prices mounted a swift recovery toward the end of last week as fears of a spreading crisis in the Eurozone and disappointing US economic news drove demand for alternative stores of value. An unexpectedly soft Philadelphia Fed print dented hopes that an accelerating US recovery will offset headwinds to global growth from sluggish conditions in Europe and Asia. The outcome marked only the second bit of significant data from the May set of activity surveys, tarnishing positive cues from the Empire Manufacturing print earlier in the week and pulling gold higher on inflation-hedge buying as traders sized up the uneven performance with minutes from the Fed’s April policy minutes. The release showed some policymakers made the case for a QE3 program in the event that growth falters.
Meanwhile, Moody’s downgraded 16 Spanish banks, citing the weak economy and mounting government debt. The announcement stoked fears that lenders in the Eurozone’s fourth-largest economy (and possibly elsewhere) may buckle as Greek-born jitters metastasize region-wide. This unearthed the possibility of another broad-based credit crisis akin to the 2008 fiasco, driving investors to seek refuge in assets of intrinsic worth that don’t necessarily rely on well-functioning financial markets to derive and maintain their value.
The week ahead presents headline event risk along both themes driving gold prices. On the US data front, the focus is on the Richmond and Kansas City Fed surveys as markets continue to expand their understanding of where world’s top economy stands in May. Expectations point to mixed results and traders will be keen to put the final outcomes in the context of last week’s news flow. The final revision of May’s University of Michigan Consumer Confidence gauge rounds out the docket. Soft readings are likely to fan the flames of QE3 speculation, driving gold higher. Scheduled remarks from the Fed’s Kocherlakota, Lockhart, Plosser and Dudley will be interpreted along the same lines.
Turning to the Eurozone, the tone for the week will be set by the G8 summit set to take place at Camp David over the weekend. Markets will be holding out hope for signs of an emerging multilateral response to ensure global financial markets are protected from contagion. The absence of concretely reassuring rhetoric is likely to add to gold’s upward momentum as a seemingly growing possibility of another market-wide rout buys demand. The preliminary set of May’s Eurozone PMI figures as well as Germany’s IFO survey of business confidence will color expectations of the degree of economic slowdown in the region. Soft outcomes will warn that sluggish performance threatens to sabotage precarious deficit-reduction efforts and amplify credit market stress. This too may prove gold-supportive if markets see the Eurozone issue as one with swelling global implications (a perception the G8 outcome is likely to establish in the near term).

> Crude Oil, Gold May Recover as Greece Eurozone Exit Fears Digest

Oil, copper, similar in scope to recover Greece fears Digest
Gold and silver may rise as US dollar following the recent advance
Commodity prices are booming in the early European trade, with markets showing signs of tentative recovery in risk appetite. A corrective rebound seems reasonable. The prospect of Greece leave the euro zone - the catalyst behind the recent defeat in the entire spectrum of risky assets - seems exhausted, the strike force have provided that the dealer a repeat of the general elections of 15 expected in June to its key to make in a position. Meanwhile, the flow of negative messages out there, probably in the price and enter the promotion of a period of profit taking.
S & P 500 stock futures are a fixed point before the opening bell on Wall Street that the feeling-oriented crude oil and copper prices are expected to continue to recover all the gold and use means money to Haven demand for dollar the scene of a to relieve pull-up. The feelings of the U.S. economy may help too much. Initial jobless claims and expects to print, bottom, meets with the former the lowest level in six weeks to 365K, while the second provides a more than four years at 3225K. In addition, the indicator of the Philadelphia Fed's business climate index recovering May, since after reaching the lowest level in April in three months. Finally, the CLI increased by 0.1 percent seen in April, to mark the seventh consecutive year, hitting the highest level since June 2008.
WTI Crude (NY Close): $ 92.81 / / -1.17 / / -1.24%
Price put in a roundabout candlestick above support at 92.51, the December low of 16, suggesting a recovery on the rest. The lines of the initial resistance to 95.41 in February, 2 Session. Low also renewed with the sale of support exposes 90.49.


Graphic Journal - Created using FXCM MarketScope 2.0
Gold Point (NY close): 1,539.57 $ / / -4.64 / / -0.30%
Price put in a spinning chandelier over support in the area from 1532.45 to 1522.50, marked by the 26th September and 29 December pin minimum, which may suggest a rebound on the rest. The first line of resistance to 1561.03, Fibonacci retracement of 23.6%. In addition, a pulse, supported 1500/oz image.


Graphic Journal - Created using FXCM MarketScope 2.0
Silver Point (NY Close): $ 27.22 / / -0.51 / / -1.84%
The prices are supported by the recovery 6:27 closing session of 28 December marks, with a view to the recovery of the initial thickness ranging from 28.54 to 70 broken by a previous level of support and marks the bottom of a channel has been set up in early March. Moreover, thanks to a boost in support, makes the region from 26.05 to 15 of 26 September and 29 December marked minimum peak.

Graphic Journal - Created using FXCM MarketScope 2.0
E-mini COMEX Copper (NY Close): $ 3.478 / / -0040 / / -1.14%
The prices are mounting a storage area recreation 3459, 50% retracement Fibonacci, with the buyers to see the original strength of 3584 by the Fibonacci levels of 38.2% marks. In addition, an investment makes to the support of the decline from 61.8% in 3334th

>>> Lower Eurozone Producer Prices Fail to Stimulate Euro Volatility

THE TAKEAWAY: PPI numbers come in lower than expected -> high energy prices continue to affect producers -> Euro trades within tight range
Producer price inflation in the 17-nation Eurozone increased less than expected in March, representing the sixth consecutive monthly drop in the gauge. The month-on-month number came in at 0.6% vs. the 0.5% predicted by economists, while the yearly number was 3.3% versus the expected 3.4%. The numbers indicated that rising production costs continue to affect European producers.
European companies are expected to continue downsizing operations and layoffs and rising energy costs combine with low economic growth, creating a stagnant economic situation.

 The Euro traded within a tight range against the US Dollar after selling off yesterday on a batch of unfortunate manufacturing data from across Europe.

TradeTheNews.com European market update: place the euro-zone finance ministers meet to decide, they were willing to accept the conditions of a Greek restructuring.

Monday, January 23, 2012 5:37:20 AM
  ***Economic Data***
- (EU) ECB: €3.3B borrowed in overnight loan facility v €3.0B prior; €491.8B parked in deposit facility vs. €420.9B prior
- (FR) France Jan Business Confidence: 91 v 95e; Production Outlook: -37 v -36e; Own-Company Production Outlook: -6 v -2 prior
- (DK) Denmark Jan Consumer Confidence: -7.0 v -7.0%r
- (CH) Swiss Dec M3 Money Supply Y/Y: 7.7% v 7.3% prior
- (CH) Swiss Q4 Real Estate Index Family Homes: 404.6 v 398.6 prior
- (IC) Iceland Dec Wage Index M/M: 0.3% v 0.3% prior; Y/Y: 9.2 v 9.0% prior

Fixed Income:
- (NO) Norway sold NOK6.0B vs. NOK6.0B indicated in in 4.25% 2017 Bonds; Yield 1.90%
- (SK) Slovakia Debt Agency (ARDAL) sold €305.2M in Zero Coupon April 2014 bonds; Yield 3.0469%; Bid-to-cover: 1.74x
- (DE) Germany sold €2.54B in 12-Month BuBills; avg yield 0.0700% v 0.3460% prior; Bid-to-cover: 2.2x v 4.3x prior
*** SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM ***
***Notes/Observations***
- Euro Zone Fin Mins to meet later today to decide what terms of a Greek restructuring they are willing to accept
- IIF Chief Dalara: Banks have made 'maximum offer' in Greek debt talks
- EU ambassadors said to have agreed to impose Iran oil embargo
Equities:
FTSE 100 +0.10% at 5708, DAX +0.10% at 6358, CAC-40 +0.70% at 3288, IBEX-35 +0.50% at 8463, FTSE MIB +0.60% at 15,367, SMI +0.30% at 6133
- European equity indices opened the session mostly lower and are currently trading mixed, amid the lower government bond yields being seen in most European markets. Overall equity markets continue to focus on the talks related to private sector involvement (PSI) in the bailout of Greece. So far on the session, Italy's FTSE MIB has outperformed on gains in the banking sector, while the DAX has underperformed amid losses in shares of Bayer. European banks are mostly higher, despite the rise being seen in the Markit iTraxx Financial index, which is implying higher credit risk on the session for financials. Outperformers in the banking sector include SocGen [GLE.FR], Commerzbank and Unicredit.
- In individual movers in the UK, Ocado Group [OCDO.UK] has declined by over 5% after announcing the resignation of its CFO. Thomas Cook [TCG.UK] is lower by more than 3% on concerns about the company's early Jan bookings. Small-cap name Immunodiagnostic Systems [IDH.UK] is down over 10% as the company disclosed a profit warning. Optos [OPTS.UK] is higher by over 2% following the release of its Q1 sales report, while Hunting [HTG.UK] has gained over 3%, after saying that its trading since mid Nov has exceeded its expectations. In Germany, shares of Bayer [BAYN.DE] have lagged the overall DAX, while Continental AG [CON.DE] is lower on speculation that the company may seek to raise capital. ThyssenKrupp [TKA.DE] is little changed, following reports that the firm could seek to merge its stainless steel unit with Outokumpu [OUT1V.FI]. German banking machine manufacturer, Wincor Nixdorf [WIN.DE], has gained over 3%, after reporting its Q1 results. European banks are mostly higher as the talks between Greece and its private sector creditors continue. Also, the FT reported that Germany and France might lobby to have certain Basel III capital rules eased in a move to support economic growth.
Speakers:
- Bank of Spain (BOS) commented in its monthly economic review that the Spanish economy would take a hit from a "significant" drop in government and household spending, partially due to strict austerity policies, only offset to some extent by a positive contribution from foreign demand.. The central bank now Q4 GDP Q/Q: -0.3% v 0.0% prior quarter and Y/Y: +0.3% v +0.8% prior quarter. Overall the BOS forecasted 2012 GDP -1.5%
- EU ambassadors were said to have agreed to impose Iran oil embargo with the grace period to end on 1st Jul (as expected) and to review the embargo by May 1st. The EU to make a specific statement on Greece over embargo
- EU was said to be near deal on ESM voting procedure with the proposal to set aside ESM cap to cover loan risk to address Finland's concerns as it could cut ESM capacity
- Hungary PM's Chief of Staff Varga commented that the country would proposed 'flexible' solutions to EU objections on its central bank law and that the planned Jan 24th meeting between PM Orban and EU's Barroso was 'important'. He noted that he would be surprised if EU/IMF objected to flat tax and that reports on €17-20B loan were not far from reality
- EU's Barnier commented that the Financial Transaction Tax (Tobin Tax) was feasible and the Vickers reforms was compatible to EU rules. Single market needed a single rule book
And that there was no plot to undermine the City of London
- France Debt Agency (AFT) Chief Mills commented that central banks, emerging sovereign funds purchased French debt at auctions held last week. He noted that about 33% of France's debt was held by those in France, 33% by EU holders and 33% by non-European holders.
- ECB has removed 3.2K debt instruments from a list of assets against which it would lend with instruments included certain types of bank debt, as these instruments might not meet the central banks' requirements. The move was unlikely to present liquidity problems for banks, as the ECB eased requirements at the start of Jan and added more than 10K new instruments.
Currencies:
- The Euro entered the session on a cautious note as the Euro Zone Fin Mins were set to meet later today to decide what terms of a Greek restructuring they were willing to accept. Negotiating a debt swap with Greece creditors made their 'maximum' offer, leaving it to the EU and the IMF to decide whether to accept the deal. The question remained whether Greece would apply a collective action clause, which can force creditors into a write-off. Nonetheless dealers noted that the net Euro short positions hit its fourth consecutive weekly high and helped the EUR/USD recoup its initial losses exhibited during the Asian session. The pair stayed above the 1.29 hendle throughout the European morning.
Political/ In the Papers:
- It was revealed in the Sunday Telegraph that more than 218K jobseekers were taken off Jobseeker's Allowance, categorized as attending courses and then classed as officially "employed". The Employment Minister Grayling stated that he will correct the 'disgraceful' practice. According to a source in the Jobcentre, the courses are generally 'completely useless' and usually did not assist in employment; as they tend only help in reducing the unemployment figures.
- Telegraph's Ambrose Evans-Pritchard said Italy and Spain are pushing for more action from the ECB, as their economies are headed towards double dip recessions. The Foreign Minister Garcia-Margallo said the ECB should do quantitative easing (QE), and suggested that the European Investment Bank be used to support the debt crisis. The recommendation by ECB President Draghi to give the unused reserves from the EFSF to the ESM could face opposition in Germany's Bundestag.
- The UK think-tank Resolution Foundation sees millions of families unlikely to see earnings return to pre-recession levels until at least 2020, while the income of the wealthy continue to increase over the same period. The disparity in future spending power is due to the incomes of the lower middle class seen to rise more slowly than the rich, and decreased spending power decreased by petrol and food costs. The middle also have to deal with prolonged wage squeeze with real wages declining by 4.2% y/y, and warned that the most significant cuts to tax credits have yet to come in affect.
***Looking Ahead***
- (RU) Russia Dec Producer Prices M/M: 0.8%e v 1.6% prior; Y/Y: 15.4%e v 15.7% prior
- 6:00 (TU) Turkey to sell 9% 2016 Bonds
- 6:00 (TU) Turkey to sell Inflation Linked 2021 Bonds
- 6:00 (IS) Israel to sell 2014, 2016, and 2022 Bonds
- 6:00 (IS) Israel to sell2014 and 2022 Inflation Linked Bonds
- 6:45 (GE) German Chancellor Merkel hosts Belgian PM Di Rupo for Berlin Talks
- 8:00 (RO) Romania to sell 6-month bills
- 8:15 (IT) EU's Tajani speaks at event in Milan
- 8:30 (CA) Canada Dec Leading Indicators M/M: No est v 0.8% prior
- 9:00 (FR) France to sell up to €8.3B in 3-month, 6-month and 12-month Bills
- 9:30 (EU) ECB calls for bids in 7-Day Main Refinancing Tender
- 9:30 (EU) ECB announces weekly settlements in its Govt Bond Purchase Program (SMP)
- 9:45 (UK) BOE to buy £1.7B in 2015-2021 Gilts in reverse auction
- 10:00 (EU) Euro Zone Jan Advanced Consumer Confidence: -21.4e v -21.1 prieo
- 10:30 (IS) Israel Central Bank Interest Rate Decision: Expected to leave the Base Rate unchanged at 2.75%
- 11:00 (EU) Euro Area Finance Ministers meet in Brussels
- 11:00 (US) Fed to purchase $1.5-2.0B in Notes
- 11:30 (US) Treasury to sell $29B in 3-Month and $27B in 6-Month Bills
- 12:00 (EU) EU, Macedonian Officials hold meeting in Brussels
- 12:00 (DE) German Chancellor Merkel gives speech in Berlin on 10 Years of the Euro
- 12;30 (DE) German Chancellor Merkel meets with EU President Van Rompuy and Barroso
- 13:00 (UK) Bank of England member Posen speaks in Nottingham
- 14:00 (AR) Argentina Dec Trade Balance: $475Me v $684M prior
- 18:00 (HU) EU's Barroso, meets Hungary PM Orban in Brussels
- (JP) BOJ Interest Rate Decision: Expected to leave the Target Rate Range unchanged from 0.0-0.10%
Legal disclaimer and risk disclosure
All information provided by Trade The News (a product of Trade The News, Inc. "referred to as TTN hereafter") is for informational purposes only. Information provided is not meant as investment advice nor is it a recommendation to Buy or Sell securities. Although information is taken from sources deemed reliable, no guarantees or assurances can be made to the accuracy of any information provided. 1. Information can be inaccurate and/or incomplete 2. Information can be mistakenly re-released or be delayed, 3. Information may be incorrect, misread, misinterpreted or misunderstood 4. Human error is a business risk you are willing to assume 5. Technology can crash or be interrupted without notice 6. Trading decisions are the responsibility of traders, not those providing additional information. Trade The News is not liable (financial and/or non-financial) for any losses that may arise from any information provided by TTN. Trading securities involves a high degree of risk, and financial losses can and do occur on a regular basis and are part of the risk of trading and investing.