Market Brief

Risk appetite was clearly the play in the Asian session as traders sold-off USD and rushed into Chinese’s equities. In other words, a pure “risk-on” rotation. Asia regional indices were broadly higher with Shanghai leading the pack up +2.87%, the Nikkei up 0.39% and the Hang Seng 1.99%. While there are considerable doubts that the US politicians will be able to formulate a solution for the impending fiscal cliff, optimism was generated by comments from China's new leader. Chinese state television quoted Communist Party chief Xi Jinping saying that he would maintain its fine tuning of the economic policies in 2013 to ensure stable economic growth. EURUSD rallied to 1.3124 before correcting slightly lower. Spot Gold climbed off the lows at $1,695 heading to $1,706 as market shrugged off worries of downgrades in Europe. JPY continued to come under selling pressure with USDJPY rallying to 82.24, while AUDJPY a solid risk barometer rose to 86.25. On the Australian data front, Australia Q3 GDP +0.5% q/q, +3.1% y/y, +0.6% and +3.1% exp. Australia's Nov new vehicle sales rose +10.9% y/y, from +2.9% in Oct. The strong move in Shanghai and in the AUD helped push NZD higher. Traders will now focus on tomorrow's RBNZ rate decision. Markets are expecting no change in the current 2.5% OCR. However, the accompanying statement and press conference could provide clues to policy expectations. We would like to hear any details on the central banks thoughts on Global and domestic economic outlook and thoughts on NZD strength. Yesterday’s big move of the CHF did little in Asia, as USDCHF trading was in a tight 0.9255 to 0.9275 range, however, EURCHF remained well bid for most of the session running to 1.2153. By the price action in Asian today it looks to be another volatile day, so stay alert. Traders will be focused on a string of PMI, EZ retail sales. In the US session we have ADP and ISM non-manufacturing.

Snap Shot

Global Indexes Current Level % Change
Nikkei 225 Index 9,468.84 0.38
Hang Seng Index 22,270.91 2.12
Shanghai Index 2,031.91 2.87
FTSE 100 Index 5,896.56 0.46
DAX Index 7,473.38 0.51
SMI Index 6,866.83 0.19
DJIA futures 12,983.00 0.38

Global Indexes Current Level % Change
Gold 1,705.10 0.44
Silver 33.18 0.75
VIX 17.12 2.88
Crude wti 88.93 0.48
USD Index 79.61 -0.04

Todays Calender Estimates Previous Country/GMT
GE PMI - services index 48.0 48.0 EUR/08.53
EZ PMI - services index 45.7 45.7 EUR/08.58
EZ PMI - composite index 45.8 45.8 EUR/08.58
current account balance -- NOK90.0 NOK/09.00
PMI - services index 51.1 50.6 GBP/09.28
Retail sales -0.1% -0.2%, EUR/10.00
ADP employment 125k 158k USD/13.15
ISM non-mfg index 53.5 54.2 USD/15.00

Currency Tech

R 2: 1.3085
R 1: 1.3020
CURRENT: 1.3120
S 1: 1.2875
S 2: 1.2835

R 2: 1.6125
R 1: 1.6070
CURRENT: 1.6105
S 1: 1.5970
S 2: 1.5940

R 2: 82.85
R 1: 82.35
CURRENT: 82.26
S 1: 81.67
S 2: 81.40

R 2: 1.0564
R 1: 1.0490
CURRENT: 1.0478
S 1: 1.0410
S 2: 1.0380

  • S: Strong, M: Minor, T: Trendline, K: Keylevel, P: Pivot