Market Snapshot 13.06.08

USD

Brief:
1.Today's US economic releases, -forecast- US CPI -YoY-MoM- (3.5% - 0.5%), US CPI Ex-food and energy -YoY-MoM- (2.3% - 0.2%) and University of Michigan consumer confidence index (59.5).
2.Yesterday's US economic releases, -actual- US Import price index -YoY-MoM- (17.8% - 2.3%), Advance retail sales -May- (1.0%), Retail Sales less autos -May- (1.2%), Initial jobless claims (384k) and US Business inventories -Apr- (0.5%).
3.Economists says a government report today may show US consumer prices probably rose in May by the most since last November as Americans paid more for food and fuel.
4.USD headed for its biggest weekly gain since last November against the yen on speculation officials from the G8 nations will make comments discouraging the dollar's decline when they meet today.
5.USD strengthens yesterday after a report showed US retail sales advanced 1.0% in May,more than economists forecast, raising speculation the Fed will increase interest rate this year.
6.
US Retail Sales increased 1% in May as Americans used their tax rebates to shop, the Commerce Department reported yesterday.

On the upside:
•Cross currencies weakness. (JPY, CAD and GBP)
•Rate raise speculation.

On the downside:
•News that might suggests Fed would have to cut/hold its rates as economy slows.
•ECB members might further supports President Trichet suggestion to increases its rate next month to cool inflation.


To monitor:
•Today's US economic releases. (Important)
•US indexes movement.
•ECB members statements/comments.
•News/statements related to Major institution.
•Other Central bank member’s statements/comments.
•Cross currency strength and weakness. (GBP, EUR, AUD, NZD, CAD and JPY –Main-)


Suggested pairs of the day:
Short: AUD/USD - NZD/USD - GBP/USD – EUR/USD –
Long: USD/JPY - USD/CHF - USD/CAD –
Possible main pairs are: – EUR/USD - USD/JPY – GBP/USD – NZD/USD – USD/CAD -


-According to 13.15GMT price-


JPY

Brief:
1.Today's Japan economic releases, -actual- BOJ Rate decision (0.50%), Japan Industrial production -MoM- (-0.2%) and Households confidence -May- (33.9).
2.JPY felled yesterday as US indexes rose after a report showed US retail sales advanced 1.0%, more than economists expected.
3.
JPY decline further today as Asian and European markets stock rose, led by exporters after a report yesterday showed US retail sales advanced more than expected, easing concern on lower consumer spending.

On the upside:
•US stock might slightly retreat as investors exits position ahead of weekends.

On the downside:
•US stock markets might rise, led by retailers, after yesterday's reports.

To monitor:
•Today's US economic releases. (Important)
•US indexes movement.
•ECB members statements/comments.
•Major corporate earnings reports.
•News related to major institution.
•Central bank member’s statements/comments.
•Economist comments on US/Japan economy, economic releases or sector growth.


Suggested pairs of the day:
Long: USD/JPY - GBP/JPY – AUD/JPY– NZD/JPY– EUR/JPY –
Possible main pairs are: –GBP/JPY – EUR/JPY – AUD/JPY - USD/JPY -

-According to 13.15GMT price-


EUR

Brief:
1.Todays Euro-zone economic releases, -actual- Germany CPI -YoY-MoM- (3.0% - 0.6%), Germany CPI EU-Harmonized -YoY-MoM- (3.1%- 0.7%), BOF Business sentiment -May- (97), Italy CPI -YoY-MoM- (3.6% - 0.5%), Italy CPI EU-Harmonized -YoY-MoM- (3.7% - 0.6%) and Euro-zone employment -YoY-QoQ- (1.6% - 0.3%).
2.EUR weakened to a 1 week low against the dollar yesterday after a report showed US retail sales advanced more than expected in May.
3.USD extended its rally against the euro yesterday after retail sales report raise speculation that Fed would raise its interest rate this year as inflation soars on rising food and oil prices.
4.EUR weakens against the dollar yesterday amid European industrial production unexpectedly rose in April, as the dollar rose on speculation Fed would raise its interest rate this year as inflation soars.

On the upside:
•Cross currency weakness. (JPY)
•Some recovery against the dollar as investors takes profit ahead of weekends.
•Other ECB members may signals that they supports ECB's President Trichet idea of a rate raise next month or near future.

On the downside:
•Cross currency strength. (USD)
•Weaker euro-zone economic growth outlook.

To monitor:
•Today's US economic releases. (Important)
•ECB member statements/comments.
•US stock indexes movement.
•News related to major corporate.
•Fed members statement/comments.
•Cross currency movement. –Main- (USD)
•Other central banks member’s statements/comments.



Suggested pairs of the day:
Short: EUR/USD – EUR/NZD – EUR/AUD – EUR/GBP –
Long: - EUR/JPY - EUR/CHF – EUR/CAD -
Possible main pairs are: – EUR/JPY – EUR/GBP - EUR/USD – EUR/CAD -

-According to 13.15GMT price-


Crude oil

Brief:
1.Crude oil fell today as the dollar headed for its biggest weekly gain in almost three years and on a report Saudi Arabia plans a sizeable increase in crude production at a June 22 meeting.
2.Crude oil rebounds from early trading session losses after Nigeria's president said the country's state owned oil company will take over operations in the Ogoni district of southern Nigeria from a Royal Dutch Shell Plc joint venture.
3.Nigerian President said in a statement yesterday after talks with French President in Paris that removal of Shell will calm down unrest by Ogoniland residents, but analysts claims the move might disrupt productions.
4.Crude oil remains supported yesterday as OPEC President Chakib Khelil ruled out the possibility that the oil producer group will raise output to curb record prices when it meets with consuming nations in Saudi Arabia later this month, dampens the hopes for production increase to ease record oil price.

On the upside:
•Atlantic hurricane season.
•Heat wave.
•Possible supply disruption.

On the downside:
•Further selling pressure as dollar recovers.
•Record prices forced weaker consumption.


To monitor:

•Today's US economic releases.
•OPEC member's comments.
•USD movement.
•Weather report.
•Atlantic ocean hurricane activities.
•US indexes movement.
•Forecast on near term US economic releases and economic growth.
•Fed or its member’s statements/comments.

Trade suggestion:
“Short”
Crude oil around low $136 and mid $136 (Today's US economic releases, USD movement and US indexes movement)
-Exit all positions before market closes-

-According to 13.15GMT price-


Time lapse prediction: (according to current situation)


14PM – 16PM GMT:

•USD remains or slightly retreats on early trading session. (Depends on economic releases)
•US capital market rises on early trading session. (Depends on economic releases)
•JPY weakens following US indexes movement.
•EUR remains or slightly recovers on early trading session.
•Crude oil weakens on early trading session.


16PM – 18PM GMT:


•USD strengthens on mid trading session. (Depends on economic releases)
•US capital markets further rises during mid trading session. (Depends on economic releases)
•JPY weakens following US capital markets movement.
•EUR weakens on mid trading session.
•Crude oil remains or slightly weakens by mid trading session.


18PM – 22PM GMT:

•USD remains or slightly retreats by late trading session.
•US capital markets remains or slightly rises by late trading session.
•JPY remains or slightly weakens following US capital markets movement.
•EUR remains or slightly strengthens by late trading session.
•Crude oil falls by late trading session.

Loh Chang Yuen,

Junior Strategist

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Admiral Markets Malaysia

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