Daily Market Highlights
Key Weekly
Economic
Indicators & Events
CENTRAL BANK OF KUWAIT
FOREIGN EXCHA NGE RA TE
Currency
JAN 1ST
CNY/ NBS Manufacturing PMI (Dec)
Current P rice
0.2811 / 0.2812
GCC EXCHA NGE RA TE
NY Clo se
Yearly High
Yearly Lo w
Currency
GLOB A L EQUITY
Index
KWD Crosses
Current
EUR
1.3216
1.3216
1.3486
1.2043
SA R
0.07495
Do w
13,096.31
GB P
1.6168
1.6168
1.6309
1.5237
A ED
0.07653
Nikkei
10,395.18
JP Y
86.01
86.01
86.63
75.93
B HD
0.74560
FTSE
5,925.37
CHF
0.9131
0.9131
0.9972
0.8932
OM R
0.73137
S&P 500
1,418.10
JAN 2nd
EUR/ CPI (DEC),
Harmonized CPI
(DEC)
USD/ ISM manufacturing PMI (DEC)
JAN 3rd
EUR/ Unemployment
Change (DEC)
USD/ FOMC minutes
Commodity & Bond
Interbank Money Market
J a n- 11
La t e s t
YT D %
O il B re nt
96.12
110.84
13.28%
G o ld
1420.8
1655.6
14.18%
3.33
1.71
-95.22%
10 - Y e a r
T re a s ury
GCC Equity Markets
C o untry
1M
3M
6M
9M
1Y
Kuwait
0.37
0.5
0.75
0.87
1
KSA
0.15
0.82
0.85
0.55
0.65
UA E
0.15
0.2
0.39
0.67
0.6
B ahrain
0.45
0.65
0.75
1.15
1
Oman
0.17
0.5
0.48
0.67
0.82
Qatar
0.25
0.4
0.5
0.7
0.85
Market Commentary
JAN 4th
Local Market
Kuwaiti Stocks fell, the KSE Price Index lost 8.82 points to close at
5,941.56.
CAD/ Net Change in
Employment (DEC)
USD/ Nonfarm Payrolls (DEC)
CAD/ Unemployment
Rate (DEC)
USD/ Unemployment
Rate (DEC)
The top gainers included KIPCO Asset Management up 9.43% and
Securities Group up 8.77%. The top losers included Kuwait United
Poultry down 12.31% & Kuwait Business Town down 8.93%.
The most active stocks by volume were Gulf Bank with 47.73M
shares traded and International Financial Advisers with 19.96M
shares traded.
Kuwait SE by Sector
The total value of shares traded was KD 45.40M which is higher
than the previous day.
International Markets
U.S. stocks fell hard on a report that President Barack Obama did
not have a new offer to avert the so-called fiscal cliff in talks with
congressional leaders Friday afternoon. S&P 500 lost 1.1%,to
1,402.43 and Dow slipped 1.2% to 12,938.11.
European stock markets opened flat to a shade higher on Friday as
investors continued to eye fiscal-cliff negotiations in the U.S. amid
news lawmakers will meet on Sunday in a final attempt to hammer
out a deal. CAC 40 fell 1.5%, DAX is down 0.6%, while FTSE 100
fell 0.5%.
Asian stocks extended gains Friday as investors held on to hopes
U.S. lawmakers could still reach an agreement before the year-end
to avert the fiscal cliff. KOSPI was up 0.5%, while ASX 200 jumped
0.5% and NIKKEI jumped 0.7%.
Hussain Abbas
Chief Dealer
Tel: + 965 2 298 8550
Foreign Exchange
[email protected]
Feryal Bastaki
Sr. Dealer
Tel: + 965 2 298 8556
[email protected]
Saud Al-Zaid
Dealer
Tel: + 965 2 298 8557
[email protected]
Hamad Al-Salem
Dealer
Tel: + 965 2 298 8558
[email protected]
Burgan Funds
EUR/USD The pair opened NY near 1.3175 after Europe sold EUR crosses.
EUR/JPY’s failure to hold above 114.50 & EUR/GBP’s rejection at key
0.8225 resistance resulted in massive EUR selling in thin holiday markets
that caught many traders off guard. EUR/USD’s slide managed to hold above
key support in the 1.3140/50 region as bids for Asians near 1.3150/60 stalled
the bears. Early NY trades took the pair off the lows as real money accounts
were reported buyers. The pair got an additional boost as risk shifted up on
better than f/c US pending home sales & Chicago PMI data. The rally gathered pace & the pair hit a NY high of 1.3238. Buyers disappeared as Europe
closed shop & risk turned south a bit. NorAm equity mkt sold off into the NY
afternoon & EUR/USD slid lower. The pair sank to 1.3215/20 where it settled
going into the close. Bulls hold onto hope as key 1.3140 level holds & the
pair remains above the 10 DMA. Caution is warranted as daily RSI & Stochs
are o/b & roll over. Narrowing 2 year yield spreads should also have bulls a
bit worried. A close below 1.3140 could see recent long exit & open a clear
path to sub-1.29 levels. USD/JPY A rare up day for the yen, save for vs the
pound, came on a mixture of technical and fundamental considerations. On
the tech side, the yen is incredibly overbought against virtually all major
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currencies and on both daily and weekly statistical measures, with IMM net spec short yen positioning almost at its historical extreme. Moreover, in Asian
trading, EUR/JPY got fairly close to the 200-WMA by 115 many traders have been using as a M-T goal, while AUD/JPY got within a few spreads of its
2011 peak at 90.00 before backing off. Egging on yen sellers were Econ Min Amari talking about a possible public-private fund to weaken the yen. But
FinMin Aso said he was not seeking drastic yen weakness and that there was risk of a near-term rebound in the yen. EUR/JPY fell from a 114.67 2012
peak to the top of its hourly Cloud, then at 113.31, on the Aso comments. There was also long EUR profit-taking aided by local growth and peripheral-tocore erosion concerns. In the end, none of the major yen crosses is close to a daily reversal confirmation, despite intraday setbacks. USD/JPY bulls look
ok while above 85.50. 87 barriers eyed above. L-T H&S target is by 92. GBP/USD Cable failed to retest yesterday's low by the 50% retracement of the
1.5828-1.6307 rise. Giving some life to prices today was word overnight the US leaders would have a meeting this afternoon re the fiscal cliff. Most now
think a partial deal will be reached by early January, if not this weekend, thus greatly diminishing the near-term event risk. For us, the bigger issue is
what, if any, monetary policy adjustment might be made after a deal. In any event, Cable rebounded to the underside of its broken up TL off the Nov &
Dec lows. There have been no daily closes above that line since it was broken on the 24th. Offers remain between 1.6175-200 and then again by this
year's triple-top circa 1.6300. A break and close below 1.6000 would trigger sell stops and momentum selling toward the Nov lows. An overdue pullback
in EUR/GBP, perhaps aided by a report noting EZ debt will be issued with CACs starting next year and more bad news on the French economy, left a
bearish engulfing pattern on the daily Candles. Prices managed to hold above the 10-DMA and the Tenkan, so the technical damage is ltd thus far. The
US Jobs on Jan 4 is the next key data focus. USD/CHF rallied overnight on word US leaders were to have a fiscal cliff meeting at the WH this afternoon.
Continental currencies were also reconsidered after French GDP was revised down to virtually nil and the use of CACs on all EZ issuance beginning
January took some of the risk-on shine off the EUR, which spilled over into the CHF. In thin London morning trading, USD/CHF surged to 0.9182 before
nearly as quickly almost retesting the overnight low at 0.9119. More chatter about the fiscal cliff and some speciously solid US econ data were not enough
to move USD/CHF out of its 15 pip range from 10 ET onward. The WH meeting starts at 3 PM today, and we suspect will last beyond the NYSE close,
leaving the Sunday session of Congress and Asia to pick up the trading thread. The less onerous the fiscal drag from a deal, the less potential easing the
Fed will have to do as an offset. Swiss KOF is out Jan 3 and is expected to weaken. USD/CAD The pair opened NY near 0.9950 after overnight action
saw a limited retracement to the 0.9940 level. Soft risk sentiment permeated markets in the early NY hours giving the USD a bid. Concerns grow that no
deal will be reached in time for the US fiscal cliff situation. NorAm equity mkts & commodities sank while USD/CAD rallied to breach 0.9960 and make
new trends highs at 0.9969. Pullbacks from the high were limited and the pair settled near 0.9960 going into the close. Bulls become emboldened with
today’s upside follow through. Daily RSI & Stochs shake off earlier reversal signals and end the day biased up while the 21 day Bolls widen & suggest the
rally has legs. Next key resistance lies near 0.9990 where the 200 DMA & Nov 21 high rest. A breach of that level could accelerate the recent rise and
see a test of November’s 1.0055/60 high. AUD/USD The big story in AUD this week is that despite a big run an major Asian equity markets courtesy of
the yen carry trade, the AUDUSD went nowhere. This is a problem because lots of positions were taken betting that it would. And just when the markets
had convinced themselves that the old correlation with Gold was passe, the two trade very similarly of late. Which is why the break of a 4-year trendline
on the weekly charts in spot Gold ought to be of some concern to the AUD bulls. A break back above this week's highs at 1.0422 should give the bulls
some breathing room. The 200 day average at 1.0300ish is the first stop on the downside. AUDJPY looks very divergent on the studies up here and given
the positioning in both currencies a falling cross would be the definitive pain trade. NZD/USD Kiwi opened NY at 0.8220 as Europe saw some short covering. Initial action in NY saw further short covering to take the pair to the day’s high at 0.8226 as US Chicago PMI and pending home sales data beat
forecasts. Additional gains were not in the cards though. Selling interest for the WMR fix took hold in illiquid trade. The pair dived down to the day’s low at
0.8181. Speculation that a deal will be reached on the US fiscal cliff situation allowed risk to rally slightly to bring the pair back to 0.8210 but the rally
faded & the pair settled near 0.8195 into the close. Bears remain in the game as a close above the cloud remains elusive while the daily RSI turns down
again. A break and close below the cloud likely accelerates the recent slide & opens the door for a test of support near 0.8110/15 (Nov 21 low, 21day
lower Bolli). Consolidation after a move typically resolves itself in the direction from which the mkt entered the consolidation. This suggests lower levels
could still be in order for this pair.