Monday, April 29, 2013

Doubt After US GDP

Last week's +0.3% GDP figure in the UK was enough to make the pound the top performer last week in a sure sign of stagnant global growth. Then Friday's US growth figure missed by a half-point and dashed the near-term hopes of the USD/JPY bulls. This week opens a day later than usual in Japan as Golden Week holidays begin. 
The first quarter GDP report from the US was a disappointment with annualized growth at 2.5% compared to the 3.0% consensus. Consumer spending was unexpectedly strong but it wasn't enough to overshadow the drag from trade and inventory drawdowns.
USD/JPY fell immediately and continued to drop until stalling just ahead of the 21-day moving average at 97.55.
The week ahead could be unpredictable for yen crosses with Japanese desks understaffed. A portion of Friday's decline in USD/JPY was probably on position squaring ahead of the holidays. There is a line of thinking that Japanese firms will begin to re-allocate asset weightings offshore following the holidays. At some point this week, we could see traders buying USD/JPY to front run that move.

Commitments of Traders
Speculative net futures trader positions as of the close on Tuesday. Net short denoted by - long by +.
EUR -34K vs -30K prior
JPY -80K vs -93K prior
GBP -60K vs -62K prior
AUD +31K vs +53K prior
CAD -72K vs -76K prior
NZD +28K vs +31K prior
CHF +1K vs -3K prior
US Dollar Index longs at 38K vs 50K prior
For the second week in a row, AUD traders backed out of long positions. Signs of a slowdown in China and the potential for an RBA rate cut are concerns but even with the large shift in positions, the Australian dollar hasn't weekend much since April 14.

Disclaimer The analysis we provide is based on the average estimate of price movements in one day. Does not guarantee what we deliver is actually a proper and correct. Everything that happens in the decisions you make on your trading transaction is to be Your responsibilities. Flag Counter Visit Us Visit Us


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