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| Action Insight Weekly Report | Markets Snapshot |
Mid-Day Report: Sterling Jumps as BoE Minutes Showed Posen Dropped Call for Adding StimulusSterling soared broadly today on more hawkish than expected BoE minutes. Adam Posen dropped his call for expanding the quantitative easing program during last meting while all nine MPC members voted to keep rates unchanged at 0.50%. Posen and David Miles voted for BoE to raise the asset purchase program by another GBP 25b back in March. But this time, only Miles was left. And even Miles now described his view as finely balanced. Overall, the minutes showed that policy makers are wary of inflation risk as it said that "there was a risk that inflation would fall more slowly than assumed in the February inflation report projections, and the recent flow of data provided some support for this view." |
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| Featured Technical Report | |
EUR/GBP Mid-Day OutlookDaily Pivots: (S1) 0.8226; (P) 0.8245; (R1) 0.8259; More. EUR/GBP's fall resumed and drops to as low as 0.8177 so far today. Intraday bias remains on the downside and current decline should extend to 61.8% projection of 0.8830 to 0.8221 from 0.8505 at 0.8129 first and then key support level at 0.8067 next. On the upside, break of 0.8276 resistance is needed to signal short term bottoming. Otherwise, we'll stay bearish even in case of recovery. |
| Special Reports |
BOC Turns Hawkish as Economic Backdrop ImprovesThe Bank of Canada, while leaving the policy rate unchanged at 1% since September 2010, delivered a more hawkish tone at the April meeting. Citing stronger momentum in domestic growth, better US outlook and the Eurozone's possible emergence from recession are adding confidence to policymakers. Yet, the downside risks on the world economic recovery would be due to high oil prices. Weighing all upside and downside risks, it's likely for the central bank to begin a rate hike by the first half of 2013. RBA's May Decision Depends on CPI DataThe April RBA minutes signaled that policymakers did not consider cutting interest rates appropriate at the meeting, despite softer employment market and downward revision in economic assessments. The possibility of a rate cut appears lower than what is priced in the market. Yet, the CPI print for 1Q12 would be a key determining factor for the monetary decision. |
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Orders and Options Watch | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
US Session: Orders and Options WatchEUR: The single currency slipped in European session on cross-selling against sterling and also stop-hunting (stops below 1.3100 and 1.3080 were triggered), however, decent demand from Asian sovereign names are still noted at 1.3065, 1.3050 as well as 1.3030 with stops building up below 1.2990. On the upside, offers from funds are reported at 1.3115-20 and also at 1.3140-50 with stops placed above there and also 1.3175-80. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Forex Trade Ideas | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Trade Idea Update: USD/CHF – Buy at 0.9150As dollar has continued to edge higher and broke above indicated resistance at 0.9200, confirming low is formed at 0.9126 and consolidation with upside bias is seen for a stronger rebound to 0.9220 and possibly towards resistance at 0.9251-54, once this level is penetrated, this would retain bullishness and signal early decline has formed a low at 0.9092 Trade Idea: AUD/USD – Buy at 1.0384Although aussie has rebounded after falling to 1.0305 yesterday, above resistance at 1.0453 is needed to signal the rebound from 1.0226 (last week’s low) is still in progress for retracement of recent decline to previous resistance at 1.0470 and then 1.0500, however, reckon previous resistance at 1.0555-60 would hold from here and bring another decline later. Candlesticks Intraday Trade Ideas Update Schedule (GMT): Elliott Wave Daily Trade Ideas Update Schedule (GMT): | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Fundamental Highlights
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