July 28th, 2010 02:22:07 GMT

Quick look at the order book

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  • EUR/JPY: Momentum funds and CTAs will add to fresh longs on breaks above 114.50 and 115.50
  • USD/JPY: Solid corporate offers right on 88.00 but talk of more stops (particularly from options players) just above there
  • EUR/USD: Light stops starting above 1.3060 through 1.3100. Very solid offers reported from 1.3115 through 1.3140. Light bids including Sovereign interest between 1.2940/60; trailing stops getting heavier below 1.2915
  • EUR/GBP: Lots of stops (myself included) below .8300
  • USD/CHF: Solid sell orders reported 1.0660/70
  • USD/CAD: Sovereign bids solid below 1.0250.

12 Comments

July 28th, 2010 01:55:47 GMT

AUD still sliding

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The AUD/USD continues to slide lower, currently trading just below .8940 and the next levels to watch are as follows:

  • AUD/JPY currently trading at 78.30 with next support a series of hourly lows at 78.15
  • EUR/AUD: Next resistance at 1.4610, support should now form at previous highs around 1.4470 and 1.4440
  • AUD/NZD: Resistance now confirmed at 1.2350; support pretty light until 1.2075
  • AUD/USD: .8880 the next major support

2 Comments

July 28th, 2010 01:34:22 GMT

AUD/USD immediately falls 50 pips after CPI

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It looks like the RBA will not be hiking again for a while after the latest CPI figures for Q2 followed the trend set by the PPI earlier in the week. AUD/USD is now back below the 200-day MA and next major support is the previously strong resistance level at .8880.

10 Comments

July 28th, 2010 00:47:04 GMT

EUR/JPY continues to slide

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Typical Asian trading session; any momentum which was built up overnight is slowly but surely drained out of the market. EUR/JPY has fallen from an opening level of 114.25 to 113.85 at present. Short term bulls can try buying the dip towards the previous resistance levels at 113.50 with a fairly tight stop in place.

7 Comments

July 28th, 2010 00:28:58 GMT

South Korean central bank buying USD/KRW

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They are trying their best to slow the rise in the Won. Do not be surprised if they show up on the bid in EUR/USD or cable, or on the offer in USD/JPY. They often switch pretty quickly out of their excess USD positions as they seek to keep their reserves pretty much in balance.

4 Comments

July 28th, 2010 00:08:16 GMT

Nikkei opens +1.25%

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USD/JPY is being capped by corporate offers starting at 88.00 which may take some time to work through according to interbank dealers.

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July 28th, 2010 00:05:48 GMT

Obama To Urge Congress to Act to Support Small Businesses

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WASHINGTON (MNI) – The White House announced Tuesday that President
Obama will meet with a group of small business owners in Edison, New
Jersey Wednesday to discuss the economy and urge Congress to pass
support for small businesses. The President will discuss with the small
business owners how the small business legislation that the Senate is
expected to vote on this week will help businesses like theirs grow and
hire more workers.

The following is the text of a fact sheet on Obama’s small business
jobs proposals:

I. Administration Lending Initiatives to Provide Credit to Small
Businesses

1. A New Small Business Lending Fund Providing Small Banks With
Incentives to Lend to Small Businesses: By providing $30 billion in
capital to small banks with incentives to increase small business
lending, the SBLF– which would be established, through new legislation,
as completely separately from TARP — could support several multiples of
that amount in new lending. Program Limited to Smaller Banks — The
Banks on Main Street Focused On Small Business Lending

– Only the Smallest Lenders Are Eligible for the SBLF: Over 90% of
eligible banks will have less than $1 billion of assets. Only lenders
with less than $10 billion in assets will be eligible for the SBLF.

– The Small Banks Eligible for The Program Are the Lenders That
Focus Their Lending on Small Businesses: For example, at the average
bank under $1 billion in assets, about 80 percent of commercial and
industrial (C&I) lending is in loans under $1 million. Program is
Performance-Based — With Capital Structured to Include Incentives to
Increase Lending

– Banks Rewarded for Increasing Responsible Lending: The rate banks
pay on SBLF capital would decrease to as low as 1 percent if they
increase lending more than 10 percent compared to the previous year. The
rate would increase to 7 percent for banks that do not increase small
business lending after two years. The program is structured to encourage
lenders to pass on the program’s benefits through lower interest rates
for creditworthy borrowers.

– CBO Estimates Program Would Provide Over $1 Billion in Savings to
the Taxpayers

2. A New State Small Business Credit Initiative to Support $10 in
Lending for Every $1 in Federal Funding: In consultation with several
Governors and Members of the House and Senate, the President proposed a
State Small Business Credit Initiative (SSBCI) to strengthen state
programs that support lending to small businesses and small
manufacturers. The program allows states to build upon successful
models, including collateral support programs, Capital Access Programs
(CAPs), and loan guarantee programs. Bolsters Innovative State Programs,
Supporting Over $20 Billion in Lending As Designed by Administration:
The SSBCI — as designed — will provide up to $2 billion in grants to
innovative small business programs, many of which face cutbacks due to
state budget shortfalls. States would be required to demonstrate at
least $10 in new lending for every $1 in Federal funding and use federal
funds for programs that leverage private lenders to extend greater
credit to small businesses and manufacturers who are creditworthy, but
are not getting the loans they need to create jobs — resulting in over
$20 billion in lending at the Administration’s proposed $2 billion
funding level.

3. Enhancements to Strengthen Key Small Business Administration
Lending Programs

Extension of Critical SBA Recovery Act Provisions for Higher Loan
Guarantees and Temporary Fee Eliminations: The Administration has called
for — and the Senate bill includes — extensions of Recovery Act
provisions increasing the maximum guarantee on 7(a) loans to 90 percent
and temporarily eliminating certain fees for the 7(a) and 504 programs.
These provisions helped increase SBA weekly loan volume by more than 90
percent compared to the weeks before the Recovery Act passed.

Permanent Increase in Maximum Loan Sizes for SBA’s 7(a), 504, and
Microloan Programs: In line with the President’s proposal — announced
last October — to increase the maximum SBA loan sizes, the Senate bill
permanently raises the maximums for 7(a) loans from $2 million to $5
million; for 504 loans for typical borrowers from $2 million to $5
million; and for SBA microloans from $35,000 to $50,000. Temporary
Increase in Maximum Loan Sizes under SBA Express: The bill also includes
the President’s proposal — announced in February — to raise the limits
on loans made under the SBA Express program from $300,000 to $1 million.
Under the Senate bill, this enhancement would last for one year.

Temporary Allowance for Owner Occupied Commercial Real Estate
Refinancing Under the 504 Program: As the President proposed in
February, the Senate bill temporarily allows small firms to use the 504
program to refinance mortgages on certain properties which might
otherwise face foreclosure or liquidation.

Clarification of Contracting Law to Ensure Parity Between SBA
Programs: The Senate bill includes a critical clarification to small
business contracting law, which the Administration has strongly
supported, to ensure parity between SBA contracting programs by
reiterating Congress’s original intent not to prioritize one small
business development program over another.

II. New Tax Incentives to Support Small Businesses Seeking to
Expand and Grow

1. Zero Taxes on Capital Gains from Small Business Investments: The
President has called for — and the Senate bill includes — elimination
of capital gains taxes on certain small business investments. Under the
Recovery Act the President signed last year, 75 percent of these capital
gains would be excluded from taxes — this provision goes one step
further and fully excludes these capital gains from taxes.

2. Extension of Bonus Depreciation: The bill extends — as the
President proposed in his budget — a Recovery Act “bonus depreciation”
provision that encourages businesses to invest in plants and equipment
by accelerating the rate at which they can deduct capital expenditures.
The Recovery Act provision is projected to reduce business taxes by
about $38 billion in 2009 and 2010.

3. Extension and Expansion of Small Businesses’ Ability to
Immediately Expense Capital Investments: The Administration has
supported small businesses by further extending provisions in the
Recovery Act and HIRE Act that increase the amount of investments these
firms can immediately write off–providing an tax incentive to expand
and create new jobs. The Senate legislation includes an increase in the
amount small businesses can write off and the level at which this
write-off phases out for both 2010 and 2011.

** Market News International Washington Bureau: 202-371-2121 **

[TOPICS: M$U$$$,MGU$$$,MCU$$$,MFU$$$]

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