Hiroshi Shiraishi, economist at Lehman Brothers: “We expect the BOJ to maintain its wait-and-see stance for quite some time. We expect CPI inflation to start easing towards the year-end and into next year, as oil prices fall further and the pace of economic growth remains below potential.”
Caterpillar Inc expects 2008 sales and revenue to exceed $50B, up from its previous forecast of about $50B.
Dell Inc reported fiscal second-quarter earnings dropped 17% from a year ago and missed expectations, even though sales in the quarter topped forecasts.
Fujifilm Hldgs Corp cut its annual outlook, and was downgraded by UBS and Mizuho Securities.
Microsoft Corporation is buying Greenfield Online for about $486M in cash, to boost its search presence in Europe.
Novell, Inc reported a wider third-quarter loss because of a charge related to its investments.
29.08 19:05
USD/CHF retreats after printing session highs on Chf1.1040. Currently rate holds at Chf1.1021.
The dollar declined against the yen as government reports showed
consumer spending slowed and personal income dropped in July. The
greenback was headed for its biggest monthly advance against the euro
since the European currency began trading in 1999 and its longest gain
versus the yen since 2002. The greenback has risen versus all of the
other major currencies this month on speculation the economic slowdown
that began in the U.S. is spreading to the rest of the world.
The dollar has gained
5.9% versus the euro, the best performance since the European
currency's debut. It has increased 0.7% versus the yen in August, its
fifth straight monthly gain. U.S. personal spending increased 0.2% last
month after a 0.6% advance in June, the Commerce Department said today
in Washington. Personal income fell 0.7% in July after climbing 0.1% in
the prior month.
The euro has fallen 4.9% against the yen in
August, the largest monthly drop since March 2004, on a contraction in
the European economy in the second quarter. Europe's annual inflation
eased to 3.8% in August, from 4% in the prior month, the European
Commission reported today. The European Central Bank tries to keep
inflation just below 2%.
ECB executive
board member Lorenzo Bini Smaghi said in an interview on Bloomberg
Television yesterday that inflation in the euro area is ``too high''
and must be brought below the bank's limit. The ECB's main refinancing
rate is at a seven-year high of 4.25%. The euro rose earlier versus the
dollar as crude oil for October delivery increased 1.6% to $117.46 a
barrel on concern a tropical storm threatening U.S. oil rigs in the
Gulf of Mexico will strengthen into the worst hurricane since Katrina.
The pound headed for the biggest monthly decline
against the dollar since 1992. Central bank policy maker David
Blanchflower said yesterday in an interview with Reuters that the BOE
should cut the 5% target lending rate. Sterling fell 0.2%, extending
its monthly drop to 8.2%. The pound slid 0.3% per euro. Sterling
dropped 2.4% versus the euro this month.
The yen rose as
the Japanese government announced its stimulus plan. Japan's government
announced plans to spend about 2 trillion yen ($18 billion) to revive
the world's second-largest economy. Reports today showed Japan's
inflation exceeded 2% for the first time in a decade after food and oil
prices surged and industrial production rose 0.9% last month.
29.08 18:38
Despite production shutdowns in the Gulf of Mexico as TS/Hurricane Gustav approaches, crude oil is trading at about flat on the day at $115.70
Losses on EUR/USD extended to $1.4655, earlier
reported bids at $1.4670/60 filled with little difficulty. Minor demand
interest seen around the Wednesday low area at $1.4635/30.
Stocks slipped Friday as oil
prices spiked and a report showing a big drop in personal income raised
worries about a bigger consumer spending slowdown.
The drop follows a Thursday rally, when the Dow and S&P 500 rose
for their third straight session on lower oil prices, a surprisingly
strong reading on second-quarter economic growth and a rally in the
financial sector. But stocks struggled Friday on oil prices, the
personal income report and Dell's earnings miss Thursday after the
closing bell. Before the bell government reports showed
income plunged in July as the impact of the $90 billion economic
stimulus plan wore out. The drop was the biggest monthly decline in
nearly 3 years. But spending rose in line with expectations, due to
higher prices. Personal income fell 0.7% in July after rising 0.1% in
June. Economists thought it would fall by 0.2%. Personal spending
increased by 0.2%, which was in line with forecasts. Spending rose 0.6%
in June thanks in part to higher prices. Other reports showed improvements
in manufacturing and in consumer sentiment. The Chicago PMI, a regional
read on manufacturing, rose to 57.9 from 50.8 in the previous month.
Economists thought it would dip to 50.0. The University of Michigan's
consumer sentiment index was revised higher than expected in August. Oil prices rallied
as Tropical Storm Gustav continued to threaten key production
facilities in the Gulf of Mexico, which accounts for roughly 25% of
U.S. crude supply. U.S. oil for October delivery rose $2.05 to $117.64
a barrel. Dell reported earnings after the close Thursday that fell from a year ago and missed forecasts. Shares plunged 12% Friday morning.
Economist Ian Shepherson
at HFE says it's unclear why Chi PM survey is so strong “or whether it can
last. We know that the export boom overall is greatly helping manufacters but
it is hard to imagine it wouldgenerate
such a jump in a single month. The Chicago PMI is very volatile.” Milwauke PMI
was much weaker, HFE says.
Economist Annalisa Piazza at Newedge Strategy says jump in Chicago PM
index's jump to a 2y high is probably “a statistical quirk rather than
a signal of solid strength.” The result is suspicious because the area
has a high concentration in the auto sector that remains particularly
weak. “We expect the jump in the Chicago PMI index to correct in the
coming months” and Newedge is not changing their call for mfg ISM at
49.7 in August.
From Lehman: “As a result of the recent weak consumption data, we now
expect real consumption to decline by 0.7% in Q3 and continue to fall
over the next two quarters.”
The stock market opened with meaningful losses, but made a brief
uptick on word that the Chicago Purchasing Manager Index for August
came in at a better-than-expected 57.9, which is also an improvement
from the prior reading of 50.8. The report remains a regional survey
and does not represent hard data for the national picture.
The University of Michigan consumer confidence survey for August was
also better than expected. It came in at 63.0 after a previous reading
of 61.7. Economists expected the index to total 62.0.
Losses remain broad-based.
29.08 15:16
Newedge: "PCE data confirmed that the effects of the tax rebates are waning."
Stock futures continue to portend a pessimistic tone to action Friday (S&P futures -6.7, Nasdaq futures -18.3).
Reuters has reported that Starbucks will offer more promotions and
discounts at its coffee shops. The company has been looking for ways
to appeal to new customers and existing patrons as its combats adverse
trends. Starbucks already scaled back the number of new locations it
plans to open as sales falter.
Personal income decreased 0.7% during July, but personal spending was
up 0.2% during the same month. Consumption accounts for more than
two-thirds of economic activity, making the figure key in assessing
growth. The consensus forecast called for income to slip 0.2% and
consumption to increase 0.2%. The June readings were unrevised with
income coming in at a 0.1% increase and spending coming in at a 0.6%
increase. The personal consumption expenditure (PCE) deflator was up
4.5% year-over-year, which is even with economists expectations and
above the downwardly revised previous reading of 4.0%. Core PCE was up
2.4% year-over-year, which was expected, though the previous reading
was unchanged at 2.3%. Dell missed the consensus earnings per share estimate for its latest quarter, despite strong revenue growth. Meanwhile, Marvell Technology posted better-than-expected earnings per share results after yesterday's close. Oil futures are trading higher in early action. The move partially offsets yesterday's retreat.
Easing lower to trade around Y108.45 area and thus
to the overnight low with risk that some nearby stops could be flushed.
Bids eyed Y108.35/15 though for a nearby cushion.
The dollar fell against the yen, headed for its biggest weekly drop in
almost four months, on speculation a U.S. government report will show
growth in consumer spending slowed.
The greenback also declined versus the euro, paring its biggest monthly
gain since the debut of the European single currency in 1999, as oil
prices climbed on signs a storm will disrupt production in the Gulf of
Mexico. The U.K. pound slid to near a record low against the euro after
a central bank policy maker said lower interest rates are needed to
avoid a recession.
``We've seen the dollar rally running out of steam this week as oil
prices have started to firm up again, hurting the currency,'' said Ian
Stannard, a London-based currency strategist for BNP Paribas SA. ``It's
not surprising that the dollar has weakened given the extent of its
recent gains. We see some upside potential for the euro.''
Crude oil for October delivery rose 1.1 percent to $116.82 a barrel on
concern a tropical storm threatening U.S. oil rigs in the Gulf of
Mexico will strengthen into the worst hurricane since Katrina.
The yen advanced against all 16 most-active after the Japanese
government said consumer- price growth exceeded 2 percent for the first
time in a decade as food and oil prices surged. A separate report
showed industrial production rose 0.9 percent last month, counter to
economists' expectations for a decline.
The pound headed for a 2.5 percent monthly decline versus the euro, the
largest since March, after Bank of England policy maker David
Blanchflower said yesterday in an interview with Reuters rates need to
fall.
``The euro will continue to depreciate,'' said Toru Umemoto, chief
currency analyst in Tokyo at Barclays Capital, Britain's third-biggest
lender. ``A slowdown in European economies is becoming quite evident.
We expect the ECB to keep rates on hold until the second quarter of
next year.''
EUR/USD European dealing opened with euro-dollar
trading around $1.4750, an early dip to $1.4720 meeting with decent
demand, sufficient to push the pair to highs for the day just shy of
$1.4670. The rate had eased to $1.4740 into the release of eurozone
flash CPI which came in weaker than expected, knocking the pair back
under $1.4720. Bids $1.4700, stops below, bids $1.4670/60, offers
$1.4770/80.
GBP/USD rallied through $1.8300, trading initially
to $1.8327. Rate remained above $1.8300 through the balance of the
session, extending to $1.8344 ahead of the European open before
slipping back. Downside correction accelerated in early Europe,
breaking the Asian base to $1.8260, as euro-sterling edged above
stg0.8060.
USD/JPY Early highs were made in overnight trade at Y109.57
before a steady move lower, weakness on the yen crosses adding weight
despite Toushin issuance scheduled for today, with model funds also
selling dollar-yen, taking the pair down to test importer demand in
the Y109.00 area. Dollar-yen made session lows at Y108.97 and
remained heavy. Offers Y109.00, Y109.60/70, bids Y108.35/15, Y108.00
U.S. personal spending rose 0.2 percent in July after climbing
0.6 percent in June, according to a Bloomberg News survey of
economists. Personal income fell 0.2 percent following a 0.1 percent
gain, a separate survey showed. The Commerce Department will release
the data at 8:30 a.m. in Washington.
"GDP reports
implies that the trade sector may have had enough momentum at the end
of the second quarter to offset a decline in consumer spending.
However, the pronounced deterioration of economic conditions in Europe,
Canada and Japan along with the somewhat stronger dollar will make it
much harder to sustain the healthy growth in exports."
"On
unemploy claims, the very gradual decline over the last three weeks
suggests a fundamental deterioration in labor market conditions is also
at work. We have therefore revised down our forecast for August nonfarm
payroll employment growth to -85,000 from -70,000 previously."
The dollar fell against the yen, headed for its biggest weekly drop in
almost four months, on speculation a U.S. government report will show
growth in consumer spending slowed.
The greenback also declined versus the euro, paring its biggest monthly
gain since the debut of the European single currency in 1999, as oil
prices climbed on signs a storm will disrupt production in the Gulf of
Mexico. The U.K. pound slid to near a record low against the euro after
a central bank policy maker said lower interest rates are needed to
avoid a recession.
``We've seen the dollar rally running out of steam this week as oil
prices have started to firm up again, hurting the currency,'' said Ian
Stannard, a London-based currency strategist for BNP Paribas SA. ``It's
not surprising that the dollar has weakened given the extent of its
recent gains. We see some upside potential for the euro.''
Crude oil for October delivery rose 1.1 percent to $116.82 a barrel on
concern a tropical storm threatening U.S. oil rigs in the Gulf of
Mexico will strengthen into the worst hurricane since Katrina.
The yen advanced against all 16 most-active after the Japanese
government said consumer- price growth exceeded 2 percent for the first
time in a decade as food and oil prices surged. A separate report
showed industrial production rose 0.9 percent last month, counter to
economists' expectations for a decline.
The pound headed for a 2.5 percent monthly decline versus the euro, the
largest since March, after Bank of England policy maker David
Blanchflower said yesterday in an interview with Reuters rates need to
fall.
Economist Dana Saporta at Dresdner says of
GDP, "With growth faltering among our European trading partners, and
with the dollar perhaps past its lows, we should not count on net
exports to show the same strength in the quarters ahead." On unemploy
claims, she says "consistent with a rising unemployment rate through
year-end and well into 2009."
Resistance 3: Y111.80 Resistance 2: Y110.70
Resistance 1: Y110.00
Current price: Y108.81
Support 1: Y108.40
Support 2: Y107.70 Support 3: Y106.60
Comments: Support
comes at Y108.40 (session low). Break under this level will open
the door to channel support line from Aug 15 at Y107.70. Strong support
is around channel line from Jul 16 on Y106.60. Strong resistance is
near channel line on Y110.00, further – at Y110.70 (Aug 15 highs). Key
resistance comes at 2008 highs around Y111.80/90.
Resistance 3: Chf1.1260
Resistance 2: Chf1.1100 Resistance 1: Chf1.1020
Current price: Chf0.0963
Support 1: Chf1.0900 Support 2: Chf1.0880 Support 3: Chf1.0820
Comments: Tech on USD/CHF doesn't change. USD/CHF remains within the upward channel from Jul 16, limited today by
Chf1.0880/Chf1.1260 (key support/resistance respectively). Support is
around Chf1.0900 (yesterday’s low). Below correction may widen to
channel support line on Chf1.0880 with a break under accelerates to
last week’s lows on Chf1.0820. Minor resistance comes at session highs
near Chf1.1020/25 with stronger – on trend resistance line from Mar at
Chf1.1090/00. Above key resistance comes at Chf1.1260 (the upper bound
of the channel from Jul 16).
Resistance 3: $1.8580
Resistance 2: $1.8500 Resistance 1: $1.8400
Current price: $1.8306
Support 1: $1.8240 Support 2: $1.8160
Support 3: $1.8090
Comments: cable remains under pressure after weak data. Closest support comes near last session's low on $1.8240 with a
break under to drag the pound down to Jul 2006 lows around $1.8160/70. Resistance is around $1.8400
(23.6% Fibo of $1.8800 to $1.8280 decline). Break above will bring the
rate to resent highs on $1.8490/00 and then – to Monday’s highs at
$1.8580/90.
Resistance 3:$1.4960
Resistance 2: $1.4900
Resistance 1: $1.4800
Current price: $1.4743
Support 1: $1.4670
Support 2: $1.4620 Support 3: $1.4560
Comments:
Resistance comes around $1.4800 (Monday’s high), with a break above
will let the rate to challenge $1.4900/10 (Aug 21 high and 23.6% Fibo
of $1.6030 - $1.4560 decline). Key resistance is near channel line from
Jul 22 at $1.4950/60. Support comes at $1.4670/80 (session low). Under
there is a chance to test $1.4615/20 and Tuesday’s lows on $1.4560/70.
29.08 10:36
BAS sasys "high level of continuing claims indicates that jobs remain hard to find and that labor demand is soft" and ests Aug jobs at -70k.
29.08 10:02
Eurozone HICP rate slowed to 3.8% in August
29.08 10:00
Eurozone unemployment stable in July at a seasonally adjusted rate of 7.3%
Additional
stops now going off as Y108.70 gives way Small bids now noted from
Y108.35 down to Y108.15 with additional stops below. Then note support
from the 55-day moving average at Y107.96.
The dollar fell against the yen, heading for a second weekly decline,
on speculation a U.S. government report will show growth in personal
spending slowed as home prices fell and fuel costs increased.
The greenback also weakened against the euro as oil prices climbed,
increasing costs for business and consumers in the world's largest
energy consumer. The British pound traded near a record low against the
euro as a central bank policy maker said lower interest rates are
needed to avoid a recession.
``The dollar has a weak bias,'' said Osao Iizuka, head of foreign
exchange trading at Sumitomo Trust & Banking Co. in Tokyo. ``The
unhealthy state of the U.S. economy is dictating the tempo for the
dollar. A rise in oil prices is also a negative factor for growth.''
The dollar is set for a 5.7 percent gain against the euro this month,
its largest since the single currency's 1999 debut, as oil prices
dropped 5.8 percent and the U.S. economy grew faster than estimated in
the second quarter. The euro is down 4.5 percent against the yen this
month, the largest decline since March 2004, as a slump in German
business confidence added to concern European economies will fall into
a recession.
The pound headed for a 2.3 percent monthly decline versus the euro, the
largest since March, after Bank of England policy maker David
Blanchflower said rates need to decline. It was at 80.46 pence per euro
after touching 80.61 pence yesterday, the weakest since April 17. It
reached a record low of 80.99 pence on April 16.
The pound last stood at $1.8336, on course for a 7.6 percent decline
this month, the most since October 1992. The average value of a home in
the U.K. fell 10.5 percent in August from a year earlier, Nationwide
Building Society said yesterday.
EUR/USD has got support at $1.4685 before it gained to to $1.4765.
GBP/USD having posted session high at $1.8355 fell to $1.8260 before bounsed back to $1.8300.
USD/JPY fell from Y109.60 to Y108.40.
There is a raft of Eurozone data for August due at 0900GMT,
including the economic sentiment index (seen slipping to 89.2), the
business climate indicator and flash HICP, which is expected to come in
at 3.9% y/y. The July unemployment rate is due at the same time and is
forecast to remain at 7.3%. The Italian preliminary HICP data is also
due at the same time.
Japan's benchmark Nikkei 225
ended Friday's session higher, boosted by the solid overnight gains in
the US. The benchmark Nikkei 225 gained 304.62 points, or 2.39%, to
stand at 13072.87. The broader-based TOPIX was higher by 32.56 points,
or 2.67%, at 1252.09.
The benchmark Shanghai Comp
ended the morning up 27.80 points or 1.18 pct at 2,377.94. The Shanghai
A-share Index was up 29.03 points or 1.18 pct at 2,496.42, while the
Shenzhen A-share Index rose 8.67 points or 1.29 pct to 681.41. The
FTSE/Xinhua China A 50 Index was up 121.10 points or 1.36 pct at
9,050.18 and the FTSE/Xinhua China A 200 Index rose 89.68 points or
1.37 pct to 6,656.24.
Resistance 3: Y111.80 Resistance 2: Y110.70
Resistance 1: Y110.00
Current price: Y109.07
Support 1: Y108.70
Support 2: Y107.70 Support 3: Y106.60
Comments: Support
comes at Y108.70 (yesterday’s low). Break under this level will open
the door to channel support line from Aug 15 at Y107.70. Strong support
is around channel line from Jul 16 on Y106.60. Strong resistance is
near channel line on Y110.00, further – at Y110.70 (Aug 15 highs). Key
resistance comes at 2008 highs around Y111.80/90.
Resistance 3: Chf1.1260
Resistance 2: Chf1.1100 Resistance 1: Chf1.1020
Current price: Chf0.0945
Support 1: Chf1.0900 Support 2: Chf1.0880 Support 3: Chf1.0820
Comments: USD/CHF remains within the upward channel from Jul 16, limited today by
Chf1.0880/Chf1.1260 (key support/resistance respectively). Support is
around Chf1.0900 (yesterday’s low). Below correction may widen to
channel support line on Chf1.0880 with a break under accelerates to
last week’s lows on Chf1.0820. Minor resistance comes at session highs
near Chf1.1020/25 with stronger – on trend resistance line from Mar at
Chf1.1090/00. Above key resistance comes at Chf1.1260 (the upper bound
of the channel from Jul 16).
Resistance 3: $1.8580
Resistance 2: $1.8500 Resistance 1: $1.8400
Current price: $1.8296
Support 1: $1.8240 Support 2: $1.8160
Support 3: $1.8090
Comments: cable remains under pressure after weak data. Closest support comes near last session's low on $1.8240 with a
break under to drag the pound down to Jul 2006 lows around $1.8160/70. Resistance is around $1.8400
(23.6% Fibo of $1.8800 to $1.8280 decline). Break above will bring the
rate to resent highs on $1.8490/00 and then – to Monday’s highs at
$1.8580/90.
Resistance 3:$1.4960
Resistance 2: $1.4900
Resistance 1: $1.4800
Current price: $1.4740
Support 1: $1.4670
Support 2: $1.4620 Support 3: $1.4560
Comments:
Resistance comes around $1.4800 (Monday’s high), with a break above
will let the rate to challenge $1.4900/10 (Aug 21 high and 23.6% Fibo
of $1.6030 - $1.4560 decline). Key resistance is near channel line from
Jul 22 at $1.4950/60. Support comes at $1.4670/80 (session low). Under
there is a chance to test $1.4615/20 and Tuesday’s lows on $1.4560/70.
