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Market Session Snap-Shot

Asian Session − Equities Sell Off Continues

Tue, Jan 22 2008, 09:48 GMT
by Peter Rosentreich

ACM - Advanced Currency Markets

Market Brief

Usd was stronger in Asian session as the equity market rout continues. Usd continues to gain strength against all majors except Jpy and Chf as safe haven buying gains momentum. The wide spread fear of a wider global slowdown created by the weakness of the US economy and potential recession is deteriorating market sentiment. Asian stock markets are looking to close well in the negative with Shanghai leading the losers with a 7.2% decline. Europe and US (which was closed yesterday) equity futures are also sharply lower. Energy and precious metals have also followed the global slowdown. In addition new concerns of problems in the credit markets, prompted by press reports that Bank of China is going to write down roughly $8bn, have decoupled predictions of a collapse.

As expected the BoJ held rates unchanged at 0.50% in a unanimous vote. Fukui reiterated comments from previous policy speeches stating “overseas economies” and “pace of Japans housing market recovery” remain uncertain. However, the BoJ anticipations that gradual improvement in the economy will eventually lead to tighter monetary policy remains intact.

In the UK CBI Industrial Trend as well as BoE King’s speech will have the market's attention. We could see a bounce in CBI as seasonal effects and exceedingly weak Oct. produces a slightly positive effect (or less gloomy than the market expects). King’s speech tonight has no title which hints to the fact that there is significant room for movement on MPC’s policy. Any hawkish comments will provide strength to the Gbp.

Today Bank of Canada’s rate decision will draw more than the usual interest. The BoC is widely expected to cut rates by 25bp to 4.00%. However there is still some risk that the bank will cut the rates further up to 50bp. With recent fundamentals lead by weaker than expected employment levels on both sides of the border, the CB might take a more aggressive stance.

7:35gmt - ECB’s Tumpel-Gugerell speaks

13:00gmt - US Paulson speaks

13:00gmt - ECB's Stark speaks

18:00gmt - ECB's Noyer speaks

20:10gmt - BoE’s King speaks

Currency Tech

AUDUSD
R 3: 0.8881
R 2: 0.8831
R 1: 0.8627
CURRENT: 0.8521
S 1: 0.8488
S 2: 0.8400
S 3: 0.8276

EURJPY
R 3: 158.48
R 2: 157.84
R 1: 156.41
CURRENT: 152.42
S 1: 152.32
S 2: 150.00
S 3: 149.27

USDSGD
R 3: 1.4642
R 2: 1.4600
R 1: 1.4540
CURRENT: 1.4517
S 1: 1.4382
S 2: 1.4336
S 3: 1.4264

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

Published on  Tue, Jan 22 2008, 10:03 GMT

Archive

• Asian Session – Markets higher as U.S Government seizes Fannie Mae and Freddie Mac
  Published On Mon, Sep 8 2008, 12:02 GMT
• Asian Session - Yen surges as Asian stocks continue to dwindle on growth concerns
  Published On Fri, Sep 5 2008, 08:35 GMT
• Asian Session - Japanese Yen rises against majors as Asian economies miss oil-fall benefit
  Published On Thu, Sep 4 2008, 10:15 GMT
• Asian Session - Australian consumers cut back on continued recession fears
  Published On Wed, Sep 3 2008, 10:09 GMT
• Asian Session - Autralian Central Bank cuts it's interest rate for first time in 7 years
  Published On Tue, Sep 2 2008, 10:47 GMT

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