In a recent interview the ECB"s Constancio noted that "depression and deflation are not yet seen on the horizon for Europe". However, the mere fact that the central bank member is on the lookout for such indicators does not bode well for the single currency. Most expect the ECB to cut rates further in January, with a recent Reuters poll calling the consensus 50bps.

Yet many calls for a deeper cut have already passed this desk. It remains to be seen if the European Central Bank will match these expectations but even if they do not, further reductions in EZ rates cannot be ruled out further down the line.

With 1.3445/50 capping the post-US data rally the price is once more edging lower. As we suggested the higher levels have served up better levels to sell/re-sell and EUR/USD has quickly dropped back into the 1.33s. 1.3312 marks the current intraday base but a push into the 1.32s cannot be ruled out and support at 1.3250 is still seen as the key downside level for the medium to longer-term outlook.


[ Read the rest ... ]

reuters poll   single currency   further reductions   32s   term outlook   

The Australian November Retail Sales in trend terms has come out as expected, but the seasonally adjusted result of plus 0.4% was better than expected and was good enough to help the AUD/USD bounce from 0.7190 to 0.7210.

The AUD/USD traded down to 0.7188 just before the release after hourly support around 0.7200 gave way. There is minor hourly support around 0.7180 and a break below that level could see a dip towards 0.7120 at some stage.

The AUD/USD has managed to break back above the 100-day MA around 0.7200 and the next level of hourly resistance is found around 0.7230/35. The AUD/USD trades 0.7211/16.

[ Read the rest ... ]

aud usd   retail sales   next level   resistance   trades   

Australia's retail trade trend growth slowed to 0.13% in November from 0.17% in October, in line with expectations but a touch weaker than IFR's 0.2% forecast. The seasonally-adjusted estimate posted a 0.4% gain over the month, much better than the consensus for a 0.4% fall and IFR's forecast for a 0.5% drop, while October was revised up to a solid 1.0% gain.

Compared to a year ago, retail turnover was 1.9% higher in trend terms and 2.0% higher in seasonally-adjusted terms. By state, turnover rose for a second month running in seasonally-adjusted tems for New South Wales, though alone of all states trend growth remained slightly negative thanks to a steep decline in September. Recession in the largest state continues to weigh on the overall total. By contrast, trend growth in Victoria, the next largest, has been solid at 0.6% per month for the past four months, while other states are clustering around the weak national average at 0.1-0.2%.


[ Read the rest ... ]

retail turnover   new south wales   steep decline   tems   retail trade   

Alcoa Inc said on Tuesday it would slash more than 15,000 jobs, halve capital spending and sell four businesses as it reduces aluminum production in the face of the global economic downturn.

The largest U.S. aluminum producer said it imposed a global salary and hiring freeze as it seeks to cope with what Chief Executive Officer Klaus Kleinfeld called "extraordinary times."

The cuts, the third in as many months, come less than a week before Alcoa is scheduled to report its fourth-quarter results. Alcoa said it would take almost $1 billion in charges in the quarter. Analysts expect the company to post a 1-cent per-share loss, according to Reuters Estimates,.

In after-hours trading following the news, Alcoa's shares were down nearly 4 percent at $11.64.

"Alcoa is going to get hit by some really big metal price declines and the only way to fix it is to reduce output," said analyst Charles Bradford, of Bradford Research/Soleil. "I think they need to do more. That's the only thing you can do to get the price going."

[ Read the rest ... ]

klaus kleinfeld   alcoa inc   aluminum producer   price declines   economic downturn   

The start of US trading once again proved the major turning point of the day for Cable today. That was when the market made a final run down to 1.4500, taking out the European session lows put in after the UK house price data came out, bounced, and never looked back, rather like Monday. In this case, however, EUR/GBP was a bit less of a catalyst than it was yesterday as the USD peaked at about 13:30 GMT and has been moving mainly lower since.

From a technical perspective, it is key that Cable checked its earlier sell-off well above yesterday s 1.4485 breakout point. The market has now taken out the overnight highs and is back into the upper area from Friday"s failed attempt to reach the 20-day MA. We are particularly going to be interested to see who price reacts to prices now that they have managed to get up above the 1.4760 area. That was where the rejection took place last time the market was in this area. If the market is going to make another serious run to new lows, this area would be a great point from which to start.

[ Read the rest ... ]

major turning point   european session   technical perspective   house price   lows