Today's Focus

USD

Brief:
1.Today's US economic releases, -forecast- US Unemployment rate -June- (5.4%), Initial jobless claims (No forecast figures), US Average hourly earnings -MoM- (0.3%), US NFP -June- (-55k), US Change in manufacturing payrolls -June- (-33k) and US ISM Non-manufacturing composite -June- (51.5).
2.Yesterday's US economic releases, -actual- US Factory orders -May- (0.6%).
3.The dollar fell to a two month low against the euro yesterday on speculation ECB's members will signal more rate raise to restrain inflation at tomorrow's meeting.
4.US factory orders rose 0.6% in May, because of higher oil price helped refineries and oilfields equipment companies orders soar.
5.USD remains weak against the euro yesterday as a report showed US companies shed more jobs last month than economists forecast, indicating record oil prices and the housing slump are taking an economic toll.

On the upside:
•Cross currencies weakness. (JPY and CAD)
•Some selling pressure on EUR after ECB rate decision.

On the downside:
•Further speculation on a possible major slowdown in US economy.

To monitor:
•Today's US economic releases.
•Fed members outlook and statements/comments..
•US indexes movement.
•News/statements related to Major institution.
•Other Central bank member’s statements/comments.
•Cross currency strength and weakness. (GBP, EUR, AUD, NZD, CAD and JPY –Main-)


Suggested pairs of the day:
Short: AUD/USD - NZD/USD - GBP/USD – EUR/USD –
Long: USD/JPY - USD/CHF – USD/CAD -
Possible main pairs are: – EUR/USD – NZD/USD - GBP/USD – USD/CAD – AUD/USD -

-According to 12.15GMT price-

JPY

Brief:
1.Tomorrow's Japan economic releases, -forecast- Japan Leading index (93.0%) and Japan Coincident index (103.4%).
2.JPY weakens against most currencies today amid European stock indexes slightly weakens on concern record oil prices would hurt economic growth.
3.JPY recovers from losses yesterday as US stocks fell sending the Dow Jones Industrial index into a bear market (-20%), after oil rose to a record and steelmakers and coal producers retreated on concern the economic slump will worsen.

On the upside:
•Commodities might retreat on selling pressure.
•US stock markets might further retreat on selling pressure.

On the downside:
•US stocks might further rise on short-covering as investors exit positions ahead of tomorrow's US Federal holiday.
•Cross currency strength (USD and GBP)

To monitor:
•Today's US economic releases.
•Tomorrow's Japan economic releases.
•Fed members outlook and statements/comments.
•ECB members' statements/comments.
•Central bank member’s statements/comments.
•US stock indexes movement.
•Major corporate earnings reports.
•News related to major institution.
•Economist comments on US/Japan economy, economic releases or sector growth.

Suggested pairs of the day:
Long: USD/JPY - GBP/JPY – AUD/JPY– NZD/JPY– EUR/JPY –
Possible main pairs are: –GBP/JPY – EUR/JPY - USD/JPY – NZD/JPY -

-According to 12.15GMT price-


EUR

Brief:
1.Today's Euro-zone economic releases, -actual- Italy PMI -Services-June- (48.5), France PMI -Services-June- (50.1), Germany PMI -Services-June- (52.1), Euro-zone PMI -Services-June- (49.1), Euro-zone Retail sales -YoY-MoM- (0.2% - 1.2%) and ECB Rate decision (4.25%).
2.Tomorrow's Euro-zone economic releases, -forecast- France Central government balance -May- (No forecast figures) and Germany Factory orders -MoM- (0.8%).
3.EUR weakens against the dollar today amid European retail sales unexpectedly rose in May by 1.2%, rebounding from 2 months of declines and ECB raised interest rates by 0.25% to fight inflation even as economic growth cools.
4.EUR remains strong against the dollar and rose to 2 months high against the dollar yesterday as ECB President Trichet told a Germany newspaper that we central banks have a big responsibility, If we're not decisive, there's a risk of inflation exploding, suggesting ECB may raise rate aggressively to restrain inflation.
5.EUR strengthens against the dollar yesterday on buying interest as investors lock in position ahead of today's ECB meeting on speculation the central bank members will signal another rate raise within this year to control inflation in the region.

On the upside:
•Cross currency weakness. (JPY and CAD)
•ECB members may suggest aggressive rate raise if inflation continue to rise.

On the downside:
•Possible some selling pressure after today's rate decision/meeting shows nothing significant.
•Cross currency strength. (USD and GBP)
•Weaker euro-zone economic growth outlook.

To monitor:
•Today's US economic releases.
•Tomorrow's Euro-zone economic releases.
•ECB members' statements/comments.
•Fed members statement/comments.
•US stock indexes movement.
•News related to major corporate.
•Cross currency movement. –Main- (USD)
•Other central banks member’s statements/comments.

Suggested pairs of the day:
Short: EUR/USD – EUR/NZD – EUR/AUD – EUR/GBP
Long: - EUR/JPY - EUR/CHF – EUR/CAD -
Possible main pairs are: – EUR/JPY – EUR/USD – EUR/CAD – EUR/GBP -

-According to 12.15GMT price-


Crude oil

Brief:
1.Crude oil rose to a record above $145 today as investors sought an alternative to tumbling stock markets and Nexen Inc 200,000 barrel a day Buzzard field halted yesterday for maintenance.
2.Crude oil rose yesterday after Energy Department storage report shows crude oil inventories unexpectedly fell after previous week gain.
3.Crude oil remains strong yesterday amid US stocks market tumble as oil rose to a record and steelmakers and coal producers retreated on concern the economic slump will worsen.
4.Crude oil inventories rose 2.0Million barrels last week, gasoline inventories increased by 2.1Million barrels last week while distillate fuel inventories increased by 1.3Million barrels.
5.Refineries operated at 89.2% of their capacity last week, up 0.6% from the previous week and US crude oil imports averaged about 10.2Million barrels per day last week, down 83,000 barrels from the previous week.

On the upside:
•Atlantic hurricane season.
•Heat wave.
•Possible supply/production disruption in Nigeria.
•US stocks market might further decline on selling pressure. (Depends on today's US economic releases)

On the downside:
•Some dollar recovery.
•Fall on traders selling pressure as recent rally were consider overbought and as traders/investors exits position ahead of tomorrow's Federal holiday.
•Production raise speculation.
•Record prices forced weaker consumption and drives inflation in the US/Japan.

To monitor:
•Today's US economic releases.
•Tomorrow's Euro-zone economic releases.
•USD movement.
•Geopolitical risk.
•Fed members statement/comments.
•News related to Nigeria oilfields.
•OPEC members' comments/statements.
•Atlantic ocean hurricane activities and weather report.
•US indexes movement.
•Forecast on near term US economic releases and economic growth.

Trade suggestion:
“Short” Crude oil around low $145 and mid $145 (Today's economic release, USD movement and US indexes movement)
-Exit all positions before market closes-

-According to 12.15GMT price-


Time lapse prediction: (according to current situation)


14PM – 16PM GMT:

•USD strengthens early trading session. (Depends on today's economic releases)
•US capital market rises on early trading session. (Depends on today's economic releases)
•JPY weakens following US indexes movement.
•EUR weakens on early trading session.
•Crude oil remains or slightly falls on early trading session.


16PM – 18PM GMT:

•USD remains or slightly retreats on mid trading session. (Depends on today's economic releases)
•US capital markets remains or slightly rises on mid trading session. (Depends on today's economic releases)
•JPY remains or slightly weakens following US capital markets movement.
•EUR remains or slightly recovers on mid trading session.
•Crude oil remains or slightly recovers by mid trading session.


18PM – 22PM GMT:

•USD strengthens by late trading session.
•US capital markets remains or slightly rises by late trading session.
•JPY slightly weakens following US capital markets movement.
•EUR weakens by late trading session.
•Crude oil falls by late trading session.

Loh Chang Yuen,

Junior Strategist

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