Market Snapshot 09.06.08

USD

Brief:
1.Today's US economic releases, -forecast- US Pending home sales -MoM- (-0.3%). US Fed member's speeches, Fed Geithner (12:15PM EST) and Fed Rosengren (5PM EST).
2.Last Friday's US economic releases, -actual- US Change in NFP -May- (-49k), US Change in manufacturing payrolls -May- (-26k), Unemployment rate -May- (5.5%), US Wholesale inventories -Apr- (1.3%) and US Consumer credit -Apr- ($8.9B).
3.USD felled to a one week low against the euro last Friday after a report showed the US unemployment rate rose 0.5%, the most in more than 20 years, and biggest jump in teenage joblessness since at least 1948.
4.Economists said before reports this week that sales at US retailers probably rose in May as Americans started spending tax rebate checks and record gas prices inflated service station receipts.
5.The dollar fell to a one week low against the euro last Friday amid a government report showed non-farm payrolls fell by 49k in May, less than economists expected as US unemployment rate jumped the most in more than 20 years, reducing the chance that the Fed would raise its interest rate this year.
6.USD extended its decline after a report showed US consumer credit increased more than forecast in April at $8.9 as Americans racked up personal loans as employment slows.

On the upside:
•Cross currencies weakness. (JPY, CAD and GBP)
•Some recovery after last week retreats.
•A possible Fed funds proposal after last Friday's jobs data.

On the downside:
•Further news that suggests Fed would have to cut/hold its rates as economy slows.
•ECB members might further back President Trichet suggestion to increases its rate next month to cool inflation.


To monitor:
•US indexes movement.
•Fed member’s comments/statements.
•ECB members statements/comments.
•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 - USD/JPY – GBP/USD – NZD/USD – USD/CAD -


-According to 13.10GMT price-

JPY

Brief:
1.Today's Japan economic releases, -actual- Japan Leading economic index -Apr- (92.8%), Japan Coincident index -Apr- (101.7), Eco watchers survey -Current- (32.1) and Eco watchers survey -Outlook- (35.1).
2.Japan's longest postwar expansion may be over, as record crude oil and raw materials costs discourage companies from hiring and spending, the coincident index showed.
3.JPY strengthened against most currencies last week as US stocks markets felled after a report showed US unemployment rate rose the most in atleast 20 years.
4.US stocks tumbled, sparking the Dow Jones worst sell off in 15 months, after biggest jump in unemployment rate in 20 years and crude oil rose $10 crude heightened concern the economy will sink into a recession.

On the upside:
•Crude oil might led commodities retreat after a record per trading session gain last Friday.

On the downside:
•Cross currency strength. (USD -possible a recovery-)
•Weaker outlook on Japan’s economic growth.

To monitor:
•US indexes movement.
•ECB members statements/comments.
•Major corporate earnings reports.
•News related to major institution.
•Central bank member’s statements/comments.
•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 – AUD/JPY - USD/JPY -

-According to 13.10GMT price-


EUR

Brief:
1.Today's Euro-zone economic releases, -actual- Germany Trade balance -Apr- (15.6B Euros), Germany Current account -Apr- (14.7B Euros), Germany Imports -MoM- (0.2%) and Germany Exports -MoM- (0.5%).
2.Tomorrow's Euro-zone economic releases, -forecast- Germany Wholesale price index -YoY-MoM- (7.1% - 0.7%), France Industrial production -YoY-MoM- (1.9% - 0.3%) and Italy GDP -YoY-QoQ- (0.2% - 0.4%).
3.EUR strengthens against the dollar after a report showed Germany Trade balance widen and exports rose more than economists expected in April.
4.EUR rose to a one week high against the dollar last Friday after a report showed US unemployment rate increased the most in atleast 20 years.
5.EUR extended its rally against the dollar last Friday as crude oil rose more than $10, heightened the concern US economy will sink into a recession and the report lessen the chances that the Fed would raise its interest rate this year.

On the upside:
•Cross currency weakness. (JPY, CAD and GBP)
•Other ECB members might signals that they supports ECB's President Trichet suggestion regarding an interest rate raise next month.

On the downside:
•Cross currency strength. (USD -A possible rebound-)
•Some selling pressure after last Friday's gain.
•Weaker euro-zone economic growth outlook on rising crude oil prices.


To monitor:
•Tomorrow's Euro-zone economic releases.
•Tomorrow's US economic releases.
•ECB member statements/comments.
•US stock indexes movement.
•News related to major corporate.
•Fed members statement/comments.
•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/GBP - EUR/USD – EUR/CAD -

-According to 13.10GMT price-


Crude oil

Brief:
1.Crude oil fell today on selling pressure as traders viewed last week's $139 record as excessive and takes profit.
2.Crude oil rose more than $10 last Friday to a record as the dollar weakened after a government report showed US unemployment rate grew the most in two decades and Morgan Stanley said prices may reach $150 within a month.
3.Analysts said crude oil may fall this week because of rising US fuel inventories and declining demand as consumers react to record prices.
4.Crude oil remains near record high and close at record settlement price last Friday as dollar extended its decline against the euro on US consumer credit report and on speculation that US jobs data reduces the chance that Fed would raise its rate this year.

On the upside:
•Atlantic hurricane season.

On the downside:
•Selling pressure after last Friday's gain.
•USD might slightly recovery after last week's retreat.


To monitor:
•USD movement.
•Weather report.
•Atlantic ocean hurricane activities.
•US indexes movement.
•Forecast on near term US economic releases and economic growth.
•Fed or its member’s statements/comments.


Trade suggestion:
“Short” Crude oil around low $137 and mid $137 (USD movement and US indexes movement)
-Exit all positions before market closes-

-According to 13.10GMT price-


Time lapse prediction: (according to current situation)


14PM – 16PM GMT:

•USD remains or slightly strengthens on early trading session.
•US capital market remains weak on early trading session.
•JPY strengthens following US indexes movement.
•EUR remains or slightly retreats on early trading session.
•Crude oil remains or slightly weakens on early trading session.


16PM – 18PM GMT:

•USD strengthens on mid trading session.
•US capital markets remains or slightly rises during mid trading session.
•JPY weakens following US capital markets movement.
•EUR weakens on mid trading session.
•Crude oil retreats further by mid trading session.


18PM – 22PM GMT:

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

Loh Chang Yuen,

Junior Strategist

All rights reserved: Admiral Markets Ltd