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COMMENTARY

• Risk FX Boosted By Better Data
  Written by Boris Schlossberg
  Last updated 4/20/2012 5:03:43 AM ET
  Risk FX was boosted in morning European trade today by better than expected IFO reading out of Germany and stronger Retail Sales from UK with EUR/USD rising above the 1.3150 level while cable broke through the 1.6100 figure. German IFO survey printed better than expected rising for the sixth straight month as the country’s manufacturing sector continues to defy concerns over slowdown in economic activity in the region. IFO rose to 109.9 from 109.6 eyed just a tad higher than the 109.8 reading posted last month.
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• IFO Rises for 6th Month is Row Helping to Lift Euro
  Written by Boris Schlossberg
  Last updated 4/20/2012 4:23:46 AM ET
  German IFO survey printed better than expected rising for the sixth straight month as the country’s manufacturing sector continues to defy concerns over slowdown in economic activity in the region. IFO rose to 109.9 from 109.6 eyed just a tad higher than the 109.8 reading posted last month.
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• GBP/CAD to Resume Downtrend at 1.6030?
  Written by Bradley Gareiss
  Last updated 4/19/2012 8:59:31 PM ET
  An impulsive Elliott wave may complete near previous long term resistance within the context of a downtrend.
  3 comments
• FX: Understanding EUR Repatriation, G20
  Written by Kathy Lien
  Last updated 4/19/2012 5:05:56 PM ET
  For the third day in a row, the euro was unchanged against the U.S. dollar. Concerns about the outlook for Spanish banks were offset by what is believed to be EUR repatriation. There is no concrete evidence of this (the ECB and BIS releases come out only once a month and even then with much older data), but flows through bank trading floors and an IMF report about the need for deleveraging has helped this theory spread.
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• CAD/JPY: A Tale of Two Trades
  Written by Matthew Weller
  Last updated 4/19/2012 1:30:03 PM ET
  Earlier this morning, the CAD/JPY tested a key resistance confluence from a bearish trend line and the 50% Fibonacci retracement on the daily chart before reversing sharply lower. As of right now, the daily chart is showing a Bearish Pin Candle*, indicating a higher probability of the downtrend resuming for a potential retest of the recent double bottom near 80.30. This could yield two potential trade opportunities: one for more aggressive traders and one for more conservative traders…
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• Spanish 10-yr auction mixed
  Written by David Morrison
  Last updated 4/19/2012 12:07:15 PM ET
  US stock index futures were pointing to a positive open today, boosted by strong earnings reports from Ebay, Yum Brands, and F5 networks after the close. Despite a weaker close yesterday, investors appear to be turning more bullish as the earnings season proceeds. Although we are still in the early stages of the season, there is a general feeling of relief that the percentage of earnings beats is well above that of the fourth quarter last year. This news is overshadowing any concerns that investors have over Europe and the ambiguous economic data now emerging from the US and China. However, the results of the10-year Spanish bond auction are due out soon, and any disappointment here will also transmit through to the US indices. Traders are keeping a close eye on the yield, with a move over 6% seen as troublesome. There is also an auction of French sovereign debt this morning, which is important as it comes just before the first round of voting in the Presidential Election on Sunday. On the earnings front today we have Bank of America, Blackstone, Dupont, Microsoft and Morgan Stanley amongst others. Morgan Stanley's results will be closely studied following talk that Moody's could downgrade the investment bank's credit rating by as much as three notches next month.
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• Dollar Shrugs Off Another Round of Ugly US Data
  Written by Kathy Lien
  Last updated 4/19/2012 10:11:22 AM ET
  Despite weaker than expected U.S. economic data, most of the major currencies are trading higher against the U.S. dollar. The Federal Reserve won't be happy with the latest reports which show evidence of deterioration in
  2 comments
• EUR/USD Sees Mild Bid Off Successful Spanish Auction
  Written by Boris Schlossberg
  Last updated 4/19/2012 5:24:36 AM ET
  The EUR/USD spiked above the 1.3150 barrier but failed to hold that level in the wake of better than expected Spanish bond auction which was generally well covered as it went off at the upper end of its range. Spain was able to sell a total of 2.541B of bonds out of projected 1.5-2.5 Billion with 2 year bonds seeing bid to cover of 3.29 versus 2.0 the period prior and a yield of 3.463% versus 3.495%. The 10 year bonds saw bid to cover ratio of 2.42 versus 2.2 and a yield of 5.743% versus 5.403% last time.
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• USD/JPY Rises as Shirakawa Signals Commitment to Easing
  Written by Boris Schlossberg
  Last updated 4/19/2012 3:38:04 AM ET
  USD/JPY continued to grind higher in Asian session trade today breaking above the 81.50 level in the wake of comments by BOJ chief Masaaki Shirakawa that the central bank is committed to continuing its accommodative monetary policy. At the same time however Mr. Shirakawa warned that monetary policy can only be a temporary tool as governments must follow structural reforms.
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• Trade Recommendation Format Change
  Written by Bradley Gareiss
  Last updated 4/18/2012 8:04:58 PM ET
  I am going to slightly change the way that I label my trade ideas. Please read the full article for more details.
  1 comment
• EUR: Fearing The Spanish Bomb
  Written by Kathy Lien
  Last updated 4/18/2012 4:29:09 PM ET
  Despite some intraday volatility, the euro continued to consolidate against the U.S. dollar. For nearly 2 weeks now, the EUR/USD has traded in a relatively tight 200 pip trading range and its two way price action indicates that investors are not sure how desperate Spain’s problems will become.
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• Bulls Beware: USD/JPY Set to Reverse Lower
  Written by Matthew Weller
  Last updated 4/18/2012 1:04:12 PM ET
  The USD/JPY has now stalled at a longer-term, and thus more significant, trend line which has formed over the past month. Bolstering the near-term resistance around 81.50, we can also see the 20-day EMA, which provided support during the uptrend, comes in directly at the bearish trend line. The confluence of these two levels of dynamic resistance increases the probability of a USD/JPY reversal and a move back toward the week’s lows near 80.40.
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• Risk appetite wanes ahead of Spanish auction
  Written by David Morrison
  Last updated 4/18/2012 12:58:14 PM ET
  US stock indices were little-changed this morning but pointed to a slightly softer open. Given the size of yesterday's rally, it is surprising that traders weren't actively positioning for a profit-taking sell-off. But the market action suggests that few players are ready to go short at current levels, with most believing that the downside correction is now over. Poor economic data is being ignored, while investors have taken heart from a string of better-than-expected earnings numbers as the first quarter reporting season picks up steam. Even though analysts' estimates have been steadily revised down over the last few months, the fact that corporates are beating the numbers is enough to encourage buying. Investors are also discounting the possibility of further trouble from the euro zone. Yesterday's auction of 1 and 2-year Spanish debt was well-covered, even as yields soared from a month ago. But the big test comes tomorrow with the 10-year Spanish auction. This is far more significant as the 10-year falls well outside the protection afforded by the ECB's 3-year LTRO. There is no US economic data due out today, apart from crude Oil Inventories later this afternoon. But on the earnings front we have Abbott Labs, Bank of NY Mellon, Blackrock, Ebay, Halliburton, Qualcomm and Yum Brands, amongst others.
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• Behind Todays Moves in Currencies
  Written by Kathy Lien
  Last updated 4/18/2012 8:51:41 AM ET
  European bond yields continued to fall this morning but with U.S. equity futures pointing to a lower open,
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• Euro and Cable Go Separate Ways
  Written by Boris Schlossberg
  Last updated 4/18/2012 5:38:49 AM ET
  Euro and cable went their separate ways in morning European trade today with former dropping below the 1.3100 level as declines in equity markets in Spain and Italy weighed in sentiment while the later spiked to within striking distance of the psychologically key 1.6000 level as MPC minutes reveled a more hawkish posture from the BOE.
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