Euro Lower Despite Surge in CPI, Dollar Firm

Euro Lower Despite Surge in CPI, Dollar Firm

Action Insight Market Overview	Markets Snapshot
Euro Lower Despite Surge in CPI, Dollar Firm Euro is broadly lower today even though September flash CPI jumped to a near three year high of 3% yoy. Sentiments was weighed down by German Economy Minister Philipp Roesler's comment that even though the parliament approved a boost the the EFSF yesterday, they might not be willing to leverage the fund. Major European indices lose growth as the quarter end approaches with FTSE down -1.5%, DAX down -2.9%, CAC down -2.5% at the time of writing. EUR/USD loses 1.35 handle and is likely heading back to 1.3363 recent low. EUR/GBP also breaks a minor support at 0.8651 and is heading back to recent low of 0.8529. Also released from Eurozone, unemployment rate was unchanged at 10.0% in August. Full Report Here...
Featured Technical Report
EUR/USD Mid-Day Outlook Daily Pivots: (S1) 1.3516; (P) 1.3598 (R1) 1.3676; More. EUR/USD's break of 1.3477 minor support suggests that recovery from 1.3362 is finished at 1.3689. Intraday bias is flipped back to the downside for 1.3362 first. break will confirm resumption of recent decline and should target 161.8% projection of 1.4939 to 1.3969 from 1.4548 at 1.2979, which is close to 1.3 psychological level. On the upside, above 1.3689 will delay the bearish case and bring another recovery. But after all, we'd expect upside to be limited by 1.3936 resistance and bring fall resumption. Read more... EURUSD Technical Outlook USDJPY Technical Outlook GBPUSD Technical Outlook USDCHF Technical Outlook USDCAD Technical Outlook AUDUSD Technical Outlook EURJPY Technical Outlook EURGBP Technical Outlook EURCHF Technical Outlook GBPJPY Technical Outlook

Special Report

ECB To Cut Or Not? The annual World Bank/IMF meeting indeed showed some influences by urging European leaders to deliver more effective measures to resolve the sovereign debt crisis engulfing the Eurozone. Apart from heightening speculations for an expansion and leverage of the new EFSF, hopes loomed for the ECB to cut interest rates, as soon as at the meeting next week, in addition to other easing measures including re-launch of the covered bond purchase program and reintroduction of the 12-month loans for the region's banks. Read more...

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GMT Ccy Events Actual Consensus Previous Revised 21:45 NZD Building Permits M/M Aug 12.50% 13.00% 14.30% 23:01 GBP GfK Consumer Sentiments Sep -30 -33 -31 23:15 JPY Nomura/JMMA Manufacturing PMI Sep 49.3 51.9 23:30 JPY Household Spending Y/Y Aug -4.10% -2.80% -2.10% 23:30 JPY Jobless Rate Aug 4.30% 4.70% 4.70% 23:30 JPY Tokyo CPI Core Y/Y Sep -0.10% -0.10% -0.20% 23:30 JPY National CPI Core Y/Y Aug 0.20% 0.10% 0.10% 23:50 JPY Industrial Production M/M Aug P 0.80% 1.50% 0.40% 01:00 NZD NBNZ Business Confidence Sep 30.3 34.4 05:00 JPY Housing Starts Y/Y Aug 14.00% 4.50% 21.20% 09:00 EUR Eurozone CPI Estimate Y/Y Sep P 3.00% 2.50% 2.50% 09:00 EUR Eurozone Unemployment Rate Aug 10.00% 10.00% 10.00% 09:30 CHF KOF Swiss Leading Indicator Sep 1.21 1.41 1.61 12:30 CAD GDP M/M Jul 0.30% 0.30% 0.20% 12:30 USD Personal Income Aug -0.10% 0.10% 0.30% 12:30 USD Personal Spending Aug 0.20% 0.20% 0.80% 12:30 USD PCE Deflator Y/Y Aug 2.90% 3.00% 2.80% 12:30 USD PCE Core M/M Aug 0.10% 0.20% 0.20% 12:30 USD PCE Core Y/Y Aug 1.60% 1.70% 1.60% 13:45 USD Chicago PMI Sep 56.5 56.5 13:55 USD U. of Michigan Confidence Sep F 57.8 57.8
Orders and Options Watch
US Session: Orders and Options Watch EUR: The single currency continued to move lower throughout the day on stop-hunting activities, stops below 1.3470 were triggered, selling in EUR/CHF by European names also put pressure on euro and more stops are reported at 1.3410-20 with mixture of bids (from Middle East names in good size) and stops seen further out at 1.3350-60. On the upside, offers are tipped at 1.3500-20 and further out at 1.3550-60 with stops building up above 1.3570 and also 1.3605/10. Read more...
Forex Trade Ideas
Trade Idea Update: EUR/USD – Sell at 1.3595 As the single currency has remained under pressure after breaking support at 1.3520, suggesting the rebound from this week’s low at 1.3360 has possibly ended at 1.3690 and consolidation with downside bias is seen for further weakness to 1.3480/85 and possibly to 1.3450, however, as broad outlook is consolidative, reckon downside would be limited and 1.3400/10 would hold, bring another rebound later. Read more... Trade Idea: EUR/JPY – Hold short entered at 104.50 Despite yesterday’s rebound to 104.93, as euro has retreated after faltering below this week’s high of 104.96, retaining our bearishness and consolidation with downside bias remains for another decline, break of minor support at 103.31 would suggest top is possibly formed and bring further fall to 102.80/85 but a sustained breach there is needed to suggest the rebound from 101.95 has possibly ended and bring retest of this level. Read more... Candlesticks Intraday Trade Ideas Update Schedule (GMT): 1st Update: 0630 - 0700; 2nd Update: 0930 - 1000; 3rd Update: 1230 - 1300; 4th Update: 1500 - 1530 Pairs Covered: EUR/USD, USD/JPY, GBP/USD, USD/CHF Elliott Wave Daily Trade Ideas Update Schedule (GMT): AUD/USD, EUR/JPY: 0800 - 0830; EUR/GBP, USD/CAD: 1430 - 1500
Suggested Readings
Fundamental Highlights Euro area: Inflation Surge Hinders ECB Rate Cut U.S. Personal Spending Rises in August, Although With Downward Revisions to Prior Months Canadian GDP Posted a 0.3% Rise in July EUR Softens Overnight, CPI Jumps to 3%, German Retail Sales Slump Week-, Month-, Quarter-end Sees Risk off London Session: China Growth Fears Add To Sovereign Concerns Technical Highlights Is the EUR/USD in a Bearish Continuation or in a Bear Trap? USD/CAD Forecast: Fibonacci Expansion Targets FX Thoughts for the Day Movement Down In EURUSD Creates Opportunities For Long Positions USDCAD - Resumes Bullish Offensive, Eyes A Return Above The 1.0508 Level

Eurozone inflation

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• EMU DATA: Eurozone inflation surprised to the coming.
• EMU DATA: The unemployment rate in the Eurozone held.
• EMU Sept flash HICP +3.0% y/y vs 2.5% in August (expected 2.5%)
• USD/JPY chewing it’s way higher…
• Portugal FinMin Gaspar says structural reforms will reinforce economy’s competitiveness
• Kiwi wings clipped…
• Germany’s Schaeuble: Situation In Fin Markets Still Worrisome
• AUD/USD finds a good buyer…
• Italy August adj jobless 7.9%
• EUR/USD extends recovery
• German FinMin Schaeuble: International financial market situation is still cause for concern
• France Public Debt Rose E46.4 Bln in 2Q To 86.2% Of GDP:Insee
• Middle Eastern sovereign buying seen in EUR/USD
• Lots of talk of lumpy EUR/GBP orders
• FRANCE DATA: PUBLIC DEBT ROSE E46.4 BN IN 2Q TO OF…
• FRANCE DATA: AUG PPI FLAT M/M, +6.3% Y/Y; JUL +0.5%..
• FRANCE DATA: AUG CONSUMER GOODS SPENDING +0.2% M/M,..
• French August consumer spending +0.2% m/m
• EUR/GBP touch firmer in early European trade
• German EconMin Roesler says sees no need to boost Europe’s EFSF fund with leveraging

EMU DATA: Eurozone inflation surprised to the coming. Posted: EMU DATA: Eurozone inflation surprised to the upside, coming in at +3.0% for the year in September, its highest level in nearly three years, Eurostat reported, citing its flash forecast. – For details see MNI MainWire

EMU DATA: The unemployment rate in the Eurozone held. Posted: EMU DATA: The unemployment rate in the Eurozone held firm at 10.0% in August as expected, Eurostat reported on Friday. – See MNI MainWire for details

EMU Sept flash HICP +3.0% y/y vs 2.5% in August (expected 2.5%) Posted: Euro zone August unemployment at 10% unchanged from July- as expected EUR/USD slipped again despite no surprises. Real money downward pressure remaining in thin month end trading with euro down around 10 ticks to 1.3525

USD/JPY chewing it’s way higher… Posted: Almost up to the Asian highs of 76.86 with a recent  high of 76.84, but as usual a painfully slow process. Offers apparently are plentiful ahead of stops poised on a break of 77.05 and 77.35/40

Portugal FinMin Gaspar says structural reforms will reinforce economy’s competitiveness Posted: State will drastically reduce presence in private sector

Kiwi wings clipped… Posted: But it couldn’t fly anyway…. Having seen earlier  6 month lows of  0.7627  the poor old bird is continuing to struggle, despite some strong buying from a major Swiss name and some proprietary accounts., which rallied the pair to 0.7643 A sovereign interest has been seen on the sell side  which is keeping NZD/USD heavy after [...]

Germany’s Schaeuble: Situation In Fin Markets Still Worrisome Posted: BERLIN (MNI) – German Finance Minister Wolfgang Schaeuble on Friday again warned that the debt crisis threatens to negatively affect the economy, noting that growth is already slowing. “The situation in international financial markets continues to be worrisome,” Schaeuble said in a speech in Germany’s upper house of parliament, the Bundesrat, ahead of a vote [...]

AUD/USD finds a good buyer… Posted: We’re picking up from earlier lows of 0.9715 with some strong buying in the 0.9735/40 area just now from a  major Australian bank. Levels to keep an eye on are  the NY low of 0.9707, where there are likely bids , but a break down through 0.9700 will target  the lows seen earlier on Monday of 0.9622. [...]

Italy August adj jobless 7.9% Posted: Down from 8.0% in July and better than Reuters’ median forecast of 8.0%.

EUR/USD extends recovery Posted: Back up at 1.3530.  Eastern European selling has slowed, but not stopped, the pairings’ recovery. Middle East 1   -   Eastern Europeans 0 Will be interesting to see how things pan out from here,  1.3530/40 was the area where real money selling kicked in earlier this morning.  Will they still be around? Time, as they say, will tell.

German FinMin Schaeuble: International financial market situation is still cause for concern Posted: We are seeing cooling down of economic growth in Germany

France Public Debt Rose E46.4 Bln in 2Q To 86.2% Of GDP:Insee Posted: PARIS (MNI) – France’s outstanding public debt rose E46.4 billion in the second quarter of this year to approximately 86.2% of GDP, up 1.7 percentage points from 1Q’s level, the national statistics institute INSEE reported on Friday. Central government debt rose 4.1% to E1.339 trillion, reflecting an increase of E52.6 billion. As was the case [...]

Middle Eastern sovereign buying seen in EUR/USD Posted: Around 1.3490. We’re at 1.3502. Talk of sell stops gathering through both 1.3475 and 1.3470. Take your pick, what’s 5 pips between friends.

Lots of talk of lumpy EUR/GBP orders Posted: Life is never easy.  Those looking for a smooth ascent in EUR/GBP on the back of Buba month end buying may be disappointed. I’m hearing talk of lumpy orders on both sides of the market.  Talk of French bank with 2.5 yards to buy, while UK clearer is said to have upwards of 3 yards [...]

FRANCE DATA: PUBLIC DEBT ROSE E46.4 BN IN 2Q TO OF… Posted: FRANCE DATA: PUBLIC DEBT ROSE E46.4 BN IN 2Q TO 86.2% OF GDP: INSEE} – For more details, please see MNI Mainwire

FRANCE DATA: AUG PPI FLAT M/M, +6.3% Y/Y; JUL +0.5%.. Posted: FRANCE DATA: AUG PPI FLAT M/M, +6.3% Y/Y; JUL +0.5% M/M} – FRANCE AUG MFG PPI FLAT M/M, +6.2% Y/Y} – FRANCE AUG OIL PRODUCT PRICES FLAT M/M, +6.7% Y/Y} – FRANCE AUG FOOD AND TOBACCO PRICES FLAT M/M, +6.8% Y/Y} – FRANCE AUG IND IMPORT PRICES -0.4% M/M, +7.6% Y/Y} – For details see [...]

FRANCE DATA: AUG CONSUMER GOODS SPENDING +0.2% M/M,.. Posted: FRANCE DATA: AUG CONSUMER GOODS SPENDING +0.2% M/M, +0.3% Y/Y} – FRANCE AUG CONSUMER SPENDING BELOW SURVEY MEDIAN (+0.3% M/M)} – FRANCE JUL CONSUMER GOODS SPENDING -0.2% M/M, -1.4% Y/Y} – FRANCE JUL+AUG CONSUMER SPENDING +0.5% VS 2Q; 2Q -1.9% Q/Q} – See MNI MainWire for details

French August consumer spending +0.2% m/m Posted: Slightly below Reuters’ median forecast of +0.3%. August producer prices unchanged m/m, slightly stronger than Reuters median forecast of -0.2%. EUR/USD has fallen to 1.3510.  Yesterday there was some vague talk of month end dollar demand , but as yet I haven’t managed to get this confirmed. Real money the notable sellers in this latest leg lower.  They’ve [...]

EUR/GBP touch firmer in early European trade Posted: Up at .8693 from .8680 when I sat down.  Guess we should be on the look-out for some Bundesbank buying of the cross today, given it’s the last day of the month.

German EconMin Roesler says sees no need to boost Europe’s EFSF fund with leveraging Posted: I think the Germans have made their feelings on EFSF leveraging pretty plain.