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Asian Session − Geopolitics Pressures Crude
Fri, Aug 29 2008, 11:32 GMT
by Peter Rosentreich
ACM - Advanced Currency Markets
Market Brief
The Usd was weaker in Asian session, as crude prices rallied on geopolitical tensions. The EurUsd traded from 1.4673 to 1.4758, while UsdJpy slipped from 109.70 to 109.00. The AudUsd & NzdUsd were unable to hold early gains, falling to 0.8620 and 0.7030, respectively. Crude prices rose as Russia threatened to use oil supplies to Western Europe in retaliation to NATO's naval maneuvers in the Black sea and potential EU sanctions. This negative news offset much of the positive gain yesterday, as the IEA stated it would release strategic stockpiles if storm (expected to be reclassified to Hurricane) Gustav disrupted Gulf output. Crude rose to $117.00bbl. Asian stock indexes are trading higher, following yesterday's WS rally on the unexpectedly strong US GDP figure, with Nikkei leading the way up 2.38%. European futures are pointing to a higher open.
In Japan, CPI figures released surprised to the upside, coming in at 2.3%y/y vs. 2.2% exp (the highest inflation reading in a decade). The unemployment rate dropped to 4.0% vs. 4.1% prior reading. However, despite the healthy labor market consumption indicators remain soft, with household spending falling - 0.5%. Yesterday BoJ member Suda expressed concern over the higher than expected inflation readings, which might give the market some reason to begin pricing in a rate hike. However, we see a 2008 policy rate increase highly unlikely, especially considering the BoJ has repeatedly downgraded its assessment of the domestic economy and downside risk to growth.
In the European session, the market will be watching the Eurozone flash CPI. We expect that falling energy prices should help ease headline from its record 4.0% (similarly to what we saw in German earlier in the week from 3.5% to 3.3%). The EC survey will continue to paint a gloomy picture. With few of the national survey to help guild our forecast, we expect the downward trend to continue (given the high inflation, and low consumer confidence).
| Global indexes | Current level | % Change |
| Nikkei 225 Index | 13,072.87 | 2.38 |
| Hang Seng Index | 21,392.37 | 2.04 |
| Shanghai Index | 2,397.37 | 2.01 |
| FTSE futures | 5,609.00 | 1.41 |
| DAX futures | 6,436.00 | -0.02 |
| SMI Futures | 7,189.00 | 1.29 |
| DJIA futures | 11,671.00 | -0.2 |
| World markets | Current level | % Change |
| Gold | 834.65 | 0.07 |
| Silver | 13.72 | 0.22 |
| VIX | 19.43 | -1.67 |
| Crude wti | 116.89 | 1.12 |
| USD Index | 77.03 | -0.16 |
| Todays calender | Estimates | Previous | Country / GMT |
| EC Economic Sentiment (Aug) | 89.3 | 89.5 | EZ / 9.00 |
| Unemployment Rate (Jul) | 7.30% | 7.30% | EZ / 9.00 |
| CPI (Aug Prov.) EU Harm. | 4.00% | -0.2%,+4.0 | EZ / 9.00 |
| Personal Income (Jul) | -0.20% | 0.10% | US / 12.30 |
| Personal Spending (Jul) | 0.20% | 0.60% | US / 12.30 |
| PCE Deflator (Jul) | 4.50% | 4.10% | US / 12.30 |
| Core PCE Deflator (Jul) | 0.3%(+2.4% | 0.3%(+2.3% | US / 12.30 |
| GDP (Q2 1st Est.) | 0.60% | -0.30% | CA / 12.30 |
| Chicago PMI (Aug) | 50 | 50.8 | US / 13.45 |
| U. of Michigan Consumer Conf. Index (Aug Fin.) | 62 | 61.7p | US / 14.00 |
Currency Tech
AUDUSD
R 3: 0.8846
R 2: 0.8814
R 1: 0.8693
CURRENT: 0.8688
S 1: 0.8513
S 2: 0.8505
S 3: 0.8276
EURJPY
R 3: 165.33
R 2: 164.41
R 1: 163.11
CURRENT: 161.27
S 1: 160.14
S 2: 158.61
S 3: 158.24
USDSGD
R 3: 1.4401
R 2: 1.4333
R 1: 1.4276
CURRENT: 1.4165
S 1: 1.4078
S 2: 1.4016
S 3: 1.3977
- S: Strong, M: Minor, T: Trendline, K: Keylevel, P: Pivot
Published on Fri, Aug 29 2008, 12:01 GMT
Archive
- Asian Session: NFP's disappoint as ECB stays put on rates – low volumes today for 4th July holiday
Published On Fri, Jul 3 2009, 09:58 GMT - Asian Snap: China revives the reserve currency debate and pushes for more Forex diversification
Published On Thu, Jul 2 2009, 09:20 GMT - Asian Session: Mixed Tankan only rattles but doesn't shake newfound optimism
Published On Wed, Jul 1 2009, 09:56 GMT - Asian Session: Japanese jobless data inline with expectations
Published On Tue, Jun 30 2009, 10:30 GMT - Asian Session: China and Brazil discuss bypassing the dollar for international trade
Published On Mon, Jun 29 2009, 09:57 GMT
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