Daily Market Outlook 28/06/11


Economy Data :
Consumer spending unexpectedly stagnated in May as employment prospects dimmed and rising inflation caused Americans to cut back. Purchases were little changed, the weakest outcome since June 2010, after a revised 0.3 percent gain the prior month that was smaller than previously estimated, Commerce Department figures showed today in Washington. The report showed incomes increased 0.3 percent for a second month. The gain was also less than forecast. Wages and salaries increased 0.2 percent in May after climbing 0.4 percent a month earlier. Today’s report also showed inflation picked up from a year ago.(BLB/ L8)

Federal Reserve Bank of New York President William C. Dudley said so-called bank stress tests must use scenarios that are “severe” in order to be “credible,” and disclosure of the results must be “sufficiently granular” so that they can be readily analyzed. The results of the stress tests must also be “credible in terms of expected losses,” and “there needs to be a credible capital backstop so that market participants can be sure banks will be able to raise the capital that they need under a stress environment,” he said. (BLB/L8)

Market Review

Stock :

Asia :

Seoul shares ended lower on Monday as foreign investors sold amid continued concern about the Greek debt situation ahead of a crucial parliamentary vote later this week.The Korea Composite Stock Price Index ended down 0.98 percent or 20.52 points at 2,070.29 points. KOSPI 200 Sept futures ended down 3.35 points at 272.60 points and the KOSPI 200 spot index fell 2.87 points to 271.44.[Rtr/Fr/Dny]

Hong Kong shares traded lower in thin Monday trade, but surging Chinese shares listed in the territory helped cut losses, suggesting market players who have long remained bearish might be becoming less pessimistic. Benchmark Hang Seng Index decline 0.59 percent to 22,041.77, bucking the decline in Hang Seng, the China Enterprises Index gained 0.34 percent to end at 12,478.61. Meanwhile Shanghai Composite Index ended up 0.44 percent at 2,758.23, buoyed by transport plays as oil prices fell and on expectations the market has bottomed out in the near term.[Rtr/Fr/Dny]

The Nikkei stock average dropped one percent on Monday, as euro zone debt worries weighed on markets before a crucial parliamentary vote in Greece this week, with investors fretting over fallout from the debt crisis in the banking system.The benchmark Nikkei fell 1.0 percent to 9,578.31, while the broader Topix index shed 0.9 percent to 825.64.[Rtr/Fr/Dny]

European :

European Stocks close little changed.The Stoxx Europe 600 Index advanced less than 0.1 percent to 264.01 at the 4:30 p.m. Germany’s DAX slipped 0.2 percent while France’s CAC 40 gained 0.3 percent and the U.K.’s FTSE 100 rose 0.4 percent. Greece’s ASE dropped 0.5 percent.(BLB/l8)

U.S.

U.S. stocks gain as banks get New Rules, technology shares rise.
The Dow Jones Industrial Average rose 108.98 points, or 0.9%, to 12,043.56, with all but four of its 30 components rising. The Standard & Poor’s 500 Index added 11.64 points, or 0.9%, to 1,280.09, with technology companies faring the best among 10 industry groups. The Nasdaq Composite Index COMP +1.33% gained 35.39 points, or 1.3%, to 2,688.28. For every stock that fell, more than two gained on the New York Stock Exchange, where volume topped 835 million shares.(MW/L8)

Commodities :

Gold :

Gold declined, after capping the biggest weekly drop in seven weeks, as weaker oil prices and a pledge by European Union leaders to avert a Greek default slashed the metal’s appeal as a haven. Bullion for immediate delivery declined as much as 0.3 percent to $1,498.15 an ounce and was at $1,500.18 by 3:17 p.m. in Seoul. It plunged 2.4 percent last week, the biggest loss since the week ending May 6. Futures for August delivery were little changed at $1,500.50 an ounce on the Comex in New York.(BLB/L8)

Oil :

Oil Slides on Outlook for Slower Demand as IEA May Release More Stockpiles. Crude for August delivery fell 55 cents to $90.61 a barrel on the New York Mercantile Exchange, the lowest settlement level since Feb. 18. Prices have tumbled 15 percent in the second quarter. Brent oil for August delivery rose 87 cents to $105.99 on the ICE Futures Europe exchange in London. Brent, the European benchmark contract, traded at a premium of $15.38 to U.S. futures. The difference between the front-month contracts reached a record $23.32 June 15.

Forex :

The euro gained 0.7 percent to $1.4287 at 5 p.m. in New York, from $1.4188 on June 24. It climbed 1.3 percent to 115.58 yen, from 114.13. The dollar appreciated 0.6 percent against the Japanese currency to 80.89 yen, from 80.43.

The Swiss franc, which reached a record high 1.1806 per euro last week amid investor concern Greek lawmakers would be unable to pass the austerity plan, fell for the first time in four days. It declined 0.9 percent to 1.1932 per euro.

The greenback extended losses versus the euro as stocks rose after global regulators announced rules to safeguard the world’s financial system. They said banks deemed too big to fail must hold as much as 2.5 percentage points in additional capital as part of efforts to prevent another financial crisis.

The Dollar Index fell 0.5 percent to 75.313. The Standard & Poor’s 500 Index climbed 0.9 percent. U.S. consumer purchases stalled in May, the weakest outcome since June 2010, after a revised 0.3 percent gain the prior month that was smaller than previously estimated, Commerce Department figures showed today in Washington.

The pound strengthened against the yen after the Lloyds TSB Business Barometer index for business activity in the next 12 months rose to 46 in June, The pound appreciated 0.8 percent to 129.36 yen and rose 0.2 percent versus the dollar to $1.5990.

New Zealand’s dollar, slumped after a report showed the trade surplus narrowed in May more than forecast. The currency fell 0.7 percent to 80.58 U.S. cents. The kiwi earlier touched 80.09 cents, the weakest since June 16. It declined 0.2 percent to 65.19 yen.

Canada’s dollar rose from a three-month low against the dollar as stocks advanced. It earlier touched the weakest level in more than three months after futures traders reduced bets the Bank of Canada will raise interest rates in 2011. The Canadian currency gained 0.2 percent to 98.65 cents per U.S. dollar after earlier depreciating as much as 0.3 percent to 99.13 cents, the weakest level since March 17.

Technical Outlook

ASIAN INDEX

SSI1U is forming a bearish short white body pattern on its daily chart. If it breaks below the 9,570level, a move to the downside to 9,530 should be seen, with further support at 9,490 and initial resistance now at 9,690.(MT)

HSI1M is forming a bearish harammi+ pattern on its daily chart. If it breaks below the 21,953 level, a move to the downside to 21,875 should be seen, with further support at 21,719 and initial resistance now at 22,109.(MT)

KOSPI1U is forming a bearish harammi- pattern on its daily chart. If it breaks below the 271.50 level, a move to the downside to 270.50 should be seen, with further support at 268.55 and initial resistance now at 273.45. (MT)

COMMODITIES

XAUUSD/loco gold is forming a bearish doji body pattern on its daily chart. If it breaks below the 1491.65 level, a move to the downside to 1484.45 should be seen, with further support at 1477.00 and initial resistance at 1504.25.(MT)

OIL is forming a bearish hammer- pattern on its daily chart. If it breaks below the 90.42 level, a move to the downside to 89.72 should be seen, with further support at 89.22 and initial resistance now at 91.74.(MT)

FOREX

EURJPY is forming a bullish engulfing pattern on its daily chart. If it breaks above the 115.75 level, a continuation to 116.05 should be seen, with further resistance at 116.50 and initial support at 115.19. (MT)

EURGBP is forming a bullish rising three methods pattern on its daily chart. If it breaks above the 0.8948 level, a continuation to 0.8973 should be seen, with further resistance at 0.9006 and initial support at 0.8907. (MT)

A strong bullish candlestick shows up on the daily chart of EURUSD and an upward trend line on H4 chart proves to be a strong ground for the pair. Therefore, we view the pair will likely continue go north. However, a strong resistance at 1.4310 should be taken out at first before continuing to 1.4339 – 1.4357 (TS)

A strong bullish candlestick shows up on the daily chart of USDJPY suggesting the pair will likely continue moving upward and possibly exceeding initial resistance at 81.06. Further target is seen at 81.77. Meanwhile, intraday supports are seen at 80.60 and 80.45 (TS)

A bullish piercing pattern appears on the daily chart of GBPUSD indicating a possibility of further upward move. However, GBPUSD has to deal with a strong resistance which located at 1.6010. Intraday support is seen at 1.5935 (TS)

USDCHF printed all time low at 0.8317 earlier in the day. Bearish power obviously remains dominating the market and as long as USDCHF trades below 0.8415, the pair will likely maintain the downward trend. (TS)

AUDUSD closed 1.01% lower suggesting the pair will likely continue dropping with initial downside target at 1.0355. As long as the pair trades below important short term moving average which currently at 1.0525, we maintain short term bearish view on AUDUSD. (TS)

Edited by Lukman Hqeem (lukman@financeroll.com)

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s