Dukascopy Fundamental Analysis
French and Spanish bonds extended gains on Thursday’s auction as six central banks cut dollar borrowing costs creating additional funds while China eased its monetary restraints. Spanish 5-year note yield declined to 28 b.p. to 5.58% and French 10 year bond yields dropped 21 b.p. to 3.18%. Spain managed to sell all planned amount worth $5.1 bn.
The n umber of Americans who filed claims for unemployment allowances increased more than predicted during previous week. According to Labour Department figures, jobless applications jumped by 6000 reaching 402,000 last week which included Thanksgiving day. In contrast the economists surveyed by Bloomberg predicted decline to 390,000. Russel Price, Ameriprise Financial Inc’s economist said, companies still are hiring new workers only if there is a strong need.
UK benchmark FTSE 100 Index managed to extend gains on Thursday fuelled by country’s major banks and miner companies. Index gained 0.4% to 5,527.52. HSBC Holdings PLC gained 1.3%, while Standard Chartered PLC edged up 2.8%. Fresnillo PLC advanced 4% and Randgold Resources Ltd. traded up 1.3%. Retailer Kingfi sher PLC also added to index after its shares climbed 3% on announcement about improved sales in the third quarter.
Switzerland’s GDP expanded in compliance with analysts’ forecasts in Q3, according to official data. The country’s GDP added 0.2% on a seasonally adjusted basis in Q3 compared with 0.4% growth in Q2. The economy of the country grew by 1.3% in Q2 at annual rate exceeding the expected 1.8%. The growth was mostly stimulated by increase in consumption and investments in construction. USD/CHF was traded at 0.9135, losing 0.03%.
On Thursday Japan’s Nikkei Sto ck Average followed Asian market upward trend, though at a slower pace. Japanese benchmark index gained 1.93% or 162.77 points and closed at 8,597.38. Miner companies provided major positive contribution to the index. JFE Holdings Inc. added 8.9% while Nippon Steel Corp. jumped 7.1%. Japanese auto makers return on positive side as Mazda Corp. traded up 4.38% and Honda Motor Co. increased by 3.98%.
Dukascopy Technical Analysis
Daily maximum: 1.3521
Daily minimum: 1.3417
The common European currency moved higher today as investors turned positive on hopes that the EU leaders take bold actions to tackle the debt crisis. Thus, the market mean at 1.3422 has been breached.
Daily Resistance: 1.3566; 1.3686; 1.3840. Daily Support: 1.3292; 1.3138; 1.3018. Dail y Bias: Neutral.
Daily maximum: 105.05
Daily minimum: 104.21
The market participants’ target at 104.20 was pierced today as the pair continued its rally after the markets got assured the European debt crisis will be resolved.
Daily Resistance: 104.95; 105.54; 106.35. Daily Support: 103.55; 102.74; 102.15. Daily Bias: Strongly bullish.
Daily maximum: 1.5755
Daily min imum: 1.5637
The British pound edged over the American dollar today as the Manufacturing PMI rose more-than expected, suggesting the UK economy is returning to a good shape, breaching the market mean at 1.5680.
Daily Resistance: 1.5814; 1.5924; 1.6068. Daily Support: 1.5560; 1.5416; 1.5306. Daily Bias: Neutral.
Daily maximum: 77.80
Daily minimum: 77.49
< br />The market participants’ mean at 77.66 has been broken through as more investors purchased the American dollar versus Japanese yen on higher-than-forecast ISM Manufacturing PMI at 52.7, indicating the US economy is improving.
Daily Resistance: 78.08; 78.55; 78.95. Daily Support: 77.21; 76.81; 76.34. Daily Bias: Neutral.
Daily maximum: 0.9150
Daily minimum: 0.9072
The market participants’ target at 0.9144 has been touched as the US economy posted more-than-expected construction spending and ISM Manufacturing PMI, suggesting the American economic recovery is gaining pace.
Daily Resistance: 0.9233; 0.9335; 0.9419. Daily Support: 0.9047; 0.8963; 0.8861. Daily Bias: Neutral.
“You can never get any speculation on the potential default of Norway, so there is no reason to sell the Krona.”
While the investors speculate on the Eurozone currency’s dependence on the sovereign debt crisis, Dukascopy decided to have a look at the Scandinavian currencies who maintain their “safe-haven” status for quite a long time now and, according to IMF, are still in a very good shape. Today we have put the Norwegian Krona under scrutiny with the help of an expert in macroeconomics and monetary policies, Professor Kjetil Storesletten. >>
“The debt sovereign crisis is a community problem which can only be solved by all members moving from preconceived conditions.”
Dukascopy has interviewed Brian Lucey, Professor of Finance at the prestigious School of Business in Trinity College Dublin, to discover how Ireland is doing in light of the debt crisis in Europe. Professor Lucey gives his view on the troika ruling, Germany’s behaviour in the Eurozone and provides advice on how to rectify the turmoil
What To Read Today
Draghi Opens Door to Bigger ECB Crisis Role
European Central Bank President Mario Draghi opened the door to an escalation in the central bank’s efforts to battle the debt crisis, hinting that the bank would be willing, under certain conditions, to expand the scope of its bond purchase program.
Jobless claims edge above 400,000
New claims for unemployment benefits rose unexpectedly last week, popping above 400,000 for the first time in just over a month and reinforcing the view that the battered labor market was healing only slowly.
Asia & PacificEurope
China Factory Sector Shrinks First Time in Nearly 3 Years
China’s factory sector shrank in November for the first time in nearly three years, an off icial purchasing managers’ index (PMI) showed on Thursday, underlining the central bank’s move to cut bank reserve requirements to shore up the economy.