Forex Update

GBP/USD Daily Commentary for 4.20.09

The Cable is getting clobbered after the CBI stated Britain's economic growth could be worse than forecasted. Furthermore, the CBI is urging its Chancellor not to commit more funds to economic stimulus and quantitative easing in the upcoming budget.

While one would like to believe the ease of quantitative easing would have a positive impact on the Pound, the opposite is occurring. The Cable's contraction in response to the news shows investors believe the CBI's reluctance to encourage further use of liquidity to fight the economic downturn could do more harm than good to Britain's economy.

EUR/USD Daily Commentary for 4.20.09

The EUR/USD has really deteriorated since Friday after falling below previous April lows. The EUR/USD fell into a rapid decline from here, and is presently trading back below the highly psychological 1.30 level.

Though 1.30 has been broken, we wouldn't be surprised to see some support around this area as investors take advantage of oversold conditions and hesitate leaving
1.30 behind. Serious damage has been inflicted upon the Euro in reaction to dissent among the ECB.

Gold Daily Commentary for 4.20.09

Gold's downtrend picked up speed Friday, collapsing below April lows, a fairly significant move fundamentally. The move came with subpar gains in U. S. equities, showing Gold is following the Dollar more closely than equities correlation wise.

The EUR/USD and GBP/USD made negative fundamental moves over the past two sessions as well, showing there is a real change of tide taking place. However, gold sent its message earlier this month, so further declines in the precious metal aren't a surprise.

Crude Daily Commentary for 4.20.09

Crude is experiencing an incredible selloff after our 1st tier downtrend lines reached an inflection point on Friday. The contraction comes with the S&P futures posting significant losses after the U. S. Government quietly made a move towards the nationalization of major U. S. banks.

Additionally, the Euro and Pound are experiencing collapses of their own, showing international demand for Crude could continue to decline. Crude's movement is significant despite the light volume. Crude futures have managed to crumble below our point of no return 1st tier uptrend line and April lows in the process.

S&P Daily Commentary for 4.20.09

The S&P futures are experiencing a brisk selloff despite BofA earnings coming in far above analyst expectations. The weakness comes as the U. S. government hints that it will likely convert its preferred shares in banks to common shares as opposed to asking Congress for more funding.

In effect, the government will have a controlling stake in several banks, meaning they could finally be giving into nationalization. The reality of nationalization is hitting equities hard, and implies that the capital ratios of some banks undergoing `stress tests' are questionable.

The news sets off a domino effect, making investors question the results of the `stress tests', raising uncertainty and placing large downward pressure on equities.

Treasury Bond Daily Commentary for 4.20.09

The 30 Year T-Bond futures are recovering from Friday's large selloff that saw new April lows. The strength in the 30 Year futures comes in reaction to the large selloff taking place on Wall Street today.

However, despite the present pop in the 30 Year futures, they have been exhibiting clear behavior of a downtrend. Both near-term and medium-term downtrends are in play, as displayed by our 2nd and 3rd tier downtrend lines. Despite the inherent negativity, the 30 Year futures still have February and March lows to fall back on.