Market Brief

The Asian stocks partly recovered yesterday’s losses as China’s actual foreign direct investments rose 6.3% year-on-year, overbeating the expectations of -4.8%. Hang Seng advanced 0.04%, Shanghai’s Composite added 0.5%, while Taiex and Kospi index gained 0.4% and 0.5% respectively. In Australia, the RBA minutes showed optimism on the economy well responding to policy stimulus, on China’s stability and on the rest of Asia’s progress. Aussie traded up to 1.0410, yet failed to extend gains overnight as the RBA minutes highlighted concerns on high AUD.

In Japan, the Nikkei 225 index advanced 2% as BoJ’s exiting Governor Shirakawa said he was confident on the Japanese economy, while about the two-thirds of the Japanese voters are likely to support the PM Abe’s ambition to enter US-led regional trade negotiations. JPY lost against all of its G10 major peers, though slowly as the concerns on the Cyprus bailout vote continues to crowd investors’ minds. USDJPY hit 95.75 in Asia, yet failed to extend weakness. EURJPY recovered cautiously, and traded tight in Asia ahead of the Cyprus bailout vote today.

The Cypriot parliament is expected to vote for the EU bailout plan tonight at 16:00 GMT. In our view, the bailout plan will not be approved, as the Cypriot President Anastasiades stated that he lacks support to get the levy on deposits approved. At this stage, the Eurogroup thinks that the small depositors’ (below EUR100K) savings should be guaranteed; however Cyprus needs to employ more aggressive progressivity to raise EUR5.8bln out of the bank deposits.

Yesterday, several European officials emphasized that Cyprus situation is unique and there is no risk of contagion. The head of Portugal’s Banking Association reinsured the investors that it is “absurd” to compare the Portuguese situation to Cyprus’ and it “makes no sense to consider applying tax on Portugal deposits”. On the back of European officials’ comments, Euro got lifted a small leg up late in NY. The Asian trading gave no direction to the single currency. EURUSD traded between 1.2935/70 overnight, ahead of ZEW scheduled this morning.

IMF said yesterday that the Swiss National Bank should charge banks on their excess reserves if the Swiss franc rises against the euro. As immediate reaction, EURCHF jumped to 1.2290, before easing back to 1.2215/20 zone. In Asia, the pair traded between 1.2245/67; the volatility was low.

Today, the focus is on Italian January Industrial Production and Current Account, UK February PPI m/m & y/y, UK February CPI m/m & y/y, UK February RPI m/m & y/y, Euro-Zone January Construction Output m/m & y/y, German March ZEW Survey on Economic Sentiment, Euro-Zone March ZEW Survey on Economic Sentiment and the Current Situation, Canadian January Wholesale and Manufacturing Sales, US February Housing Starts and Building Permits.

Snap Shot

Global Indexes Current Level % Change
Nikkei 225 Index 12,468.23 2.0261
Hang Seng Index 22,092.39 0.0409
Shanghai Index 2,251.42 0.5117
FTSE futures 6,370.00 -0.4221
DAX futures 8,024.50 -0.3539
SMI Futures 7,726.00 -0.3225
S&P future 1,546.70 -0.0067

Global Indexes Current Level % Change
Gold 1,605.65 0.0012
Silver 28.94 0.2251
Crude wti 93.76 0.0213
VIX 13.36 18.2301
USD Index 82.70 0.0097

Todays Calender Estimates Previous Country/GMT
IT Jan Industrial Production sa m/m -0.3% 0.4% EUR/09:00
IT Jan Industrial Production wda y/y -5.6% -6.6% EUR/09:00
IT Jan Industrial Production nsa y/y - -9.3% EUR/09:00
UK Feb PPI Input nsa m/m 1.5% 1.3% GBP/09:30
UK Fen PPI Input nsa y/y 0.8% 1.8% GBP/09:30
UK PPI Feb Output nsa m/m 004% 0.2% GBP/09:30
UK Feb PPI Output nsa y/y 1.8% 2.0% GBP/09:30
UK Feb PPI Output Core nsa m/m 0.3% 0.2% GBP/09:30
UK Feb PPI Output Core nsa y/y 1.1% 1.4% GBP/09:30
UK Feb CPI m/m 0.7% -0.5% GBP/09:30
UK Feb CPI y/y 2.8% 2.7% GBP/09:30
UK Feb Core CPI y/y 2.2% 2.3% GBP/09:30
UK Feb Retail Price Index 247.8 245.8 GBP/09:30
UK Feb RPI m/m 0.8% -0.4% GBP/09:30
UK Feb RPI y/y 3.3% 3.3% GBP/09:30
IT Jan Current Account - EUR2,362M EUR/10:00
Euro-Zone Jan Construction Output wda y/y - -4.8% EUR/10:00
Euro-Zone Jan Construction Output sa m/m - -1.7% EUR/10:00
GE Mar ZEW (Econ. Sentiment) 48.1 48.2 EUR/10:00
Euro-Zone Mar ZEW Survey (Econ. Sentiment) - 42.4 EUR/10:00
Euro-Zone Mar ZEW Survey (Current Situation) 6.0 5.2 EUR/10:00
CA Jan Wholesale Sales m/m 0.4% -0.9% CAD/12:30
CA Jan Manufacturing Sales m/m 0.6% -3.1% CAD/12:30
US Feb Housing Starts 915K 890K USD/12:30
US Feb Housing Starts m/m 2.8% -8.5% USD/12:30
US Feb Building Permits 923K 925K USD/12:30
US Feb Building Permits m/m 2.1% 1.8% USD/12:30

Currency Tech

R 2: 1.3162
R 1: 1.2966
CURRENT: 1.2935
S 1: 1.2878
S 2: 1.2810

R 2: 1.5320
R 1: 1.5226
CURRENT: 1.5095
S 1: 1.5050
S 2: 1.4986

R 2: 96.75
R 1: 96.00
CURRENT: 95.45
S 1: 93.75
S 2: 92.90

R 2: 0.9320
R 1: 0.9515
CURRENT: 0.9475
S 1: 0.9375
S 2: 0.9285

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