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- New York 12:47
- London 17:47
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- Tokyo 02:47
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Asian Session − Usd on Weak Footing
Wed, Jul 16 2008, 10:41 GMT
by Peter Rosentreich
ACM - Advanced Currency Markets
Market Brief
Usd was range bound in Asian session as markets pause from dollar selling to evaluate current pricing. However we are anticipating another busy and volatile day. EurUsd bounced between the 1.5866 - 1.5932 while UsdJpy continued to slide from 105.12 to 104.27. With risk aversion reaching elevated levels, carry trades have suffered with EurJpy dropping to 165.80 and AudJpy falling to 101.77. With concerns over the credit market mounting, it is no surprise that VIX has climbed to 28.54 and fx implied vols are following. Currently, European equities are mixed but US index futures are pointing to the upside, due primarily to the sell off in crude, which is trading at wti 138.95bll.
The EurUsd reached an all time high yesterday, ahead of Bernanke's testimony, but was able to recover slightly as oil prices took a dive (on slowing global growth concerns). Interesting to note, Bernanke gave no indication that the Fed was going to follow the ECB and raise rates anytime soon. It seems after a brief period of stability the US might still slip into a recession in the second half of the year. With payrolls declining, housing prices tanking, equity markets falling, latest GSE crisis and energy prices elevated the down side risk to the US economy having become apparent once again. Given these risks should Trichet and the ECB come out with a more explicit hawkish comments on inflation we should see the EurUsd entrench itself above the 1.6000.
In Australia, Westpac leading index continued to drop, hitting 0.0% vs. the 0.4% prior reading. RBA Governor Stevens speech today was undecidedly dovish. Clarifying the fact that the RBA feels that the current interest rate level is sufficient to combat domestic inflation. Stating "It is understandable that pressure on underlying inflation, particularly from domestic sources, has also been somewhat greater. Monetary policy had to respond to that." The AudUsd fell to 0.9750 on the news but was able to rally back on Usd selling.
Given our statement above regarding Eurzone inflation, today's reading of second estimate of CPI inflation will be critical. We are expecting headline to rise to a new record high of 4.0% as rising energy price are having a clear effect on prices. Core should stay below the 2.0% price stability ceiling, however, should pressure on core increase we would expect the ECB to maintain their hawkish tone and fx market to push Eur higher.
| Global indexes | Current level | % Change |
| Nikkei 225 Index | 12,760.80 | 0.04 |
| Hang Seng Index | 21,191.84 | 0.08 |
| Shanghai Index | 2,705.87 | -2.64 |
| FTSE 100 Index | 5,183.50 | 0.22 |
| CAC 40 Index | 4,060.85 | -0.01 |
| SMI Index | 6,531.46 | -0.46 |
| DJIA futures | 10,941.00 | 0.21 |
| World markets | Current level | % Change |
| Gold | 138.93 | 0.13 |
| Silver | 18.9 | -0.13 |
| VIX | 28.54 | 0.21 |
| Crude wti | 138.93 | 0.13 |
| USD Index | 71.65 | -0.31 |
| Todays calender | Estimates | Previous | Country / GMT |
| Average Earnings (May) (%3myy) | 3.70% | 3.80% | UK / 8.30 |
| Unemployment Rate (Jun) | 2.60% | 2.50% | UK / 8.30 |
| CPI (Jun Final) | +0.4%(+4.0 | (+4.0%)p | EZ / 9.00 |
| Core CPI (Jun) | 1.80% | 1.70% | EZ / 9.00 |
| Consumer Price Index (Jun) | +0.7%(+4.5 | +0.6%(+4.2 | US / 12.30 |
| Core Consumer Price Index (Jun) | +0.2%(+2.3 | +0.2%(+2.3 | US / 12.30 |
| Net Foreign Purchases of US Securities (May) | -- | +$60.6bn | US / 13.00 |
| Industrial Production (Jun) | 0.10% | -0.20% | US / 13.15 |
| Capacity Utilisation (Jun) | 79.40% | 79.40% | US / 13.15 |
| NAHB Housing Market Index (Jul) | 18 | 18 | US / 17.00 |
| Fed minutes for 24th-25th Jun meeting released | -- | -- | US / 18.00 |
Currency Tech
AUDUSD
R 3: 0.9923
R 2: 0.9895
R 1: 0.9849
CURRENT: 0.9776
S 1: 0.9708
S 2: 0.9664
S 3: 0.9597
EURJPY
R 3: 169.67
R 2: 168.94
R 1: 166.86
CURRENT: 165.76
S 1: 165.70
S 2: 164.76
S 3: 163.60
USDSGD
R 3: 1.3717
R 2: 1.3661
R 1: 1.3565
CURRENT: 1.3465
S 1: 1.3452
S 2: 1.3399
S 3: 1.3300
- S: Strong, M: Minor, T: Trendline, K: Keylevel, P: Pivot
Published on Wed, Jul 16 2008, 10:56 GMT
Archive
- European Session: Waiting on NFP
Published On Fri, Nov 6 2009, 09:55 GMT - European Session: FOMC Signals Low Rates To Continue Contingent On Employment And Inflation
Published On Thu, Nov 5 2009, 08:22 GMT - European Session: All Eyes on the FOMC
Published On Wed, Nov 4 2009, 10:38 GMT - European Session: RBA Hikes Rates Again But Moderates Hawkish Tone
Published On Tue, Nov 3 2009, 08:42 GMT - European Session: CIT Bankruptcy Shakes Risk Appetite...Briefly
Published On Mon, Nov 2 2009, 09:45 GMT
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