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Asian Session – Markets higher as U.S Government seizes Fannie Mae and Freddie Mac
Mon, Sep 8 2008, 12:02 GMT
by Peter Rosentreich
ACM - Advanced Currency Markets
Market Brief
EURUSD traded higher in the Asian open as markets reacted to the US government’s announcement on Sunday that they are compelled to takeover troubled mortgage giants Fannie Mae and Freddie Mac. EURUSD traded as high as 1.4427 in early morning trading as the dollar comes under pressure from this news and the high probability Hurricane IKE could make landfall in the coming days. There are two schools of thought on how the U.S government has handled the Fannie and Freddie bailout. Some say it will provide the much needed stability in the housing market the US economy needs, sending the dollar higher, while others say this action is a confirmation of the dismal and dire state of the economy – a bearish signal for the dollar. There is however little doubt that the dominant driver in currency markets will be deteriorating economic conditions and imminent falling interest rates outside the US. The continued downside risk to the European economies being highlighted by the ECB’s President Trichet late last week.
Asian markets surged this morning on the news of Fannie and Freddie’s seizure. Japan and Australia both gained 3.5%. The Yen rose 60pips on the back of this news while the Aussie traded 90pips on the upside. We expect this week to be a continued procession of weak Japanese economic data. The AUD expects RBA governor’s semiannual testimony before parliament; many will be keen to see how this affects the FX markets as he had little impact on it the last time he spoke. Retail sales (Tuesday) and Labor market report (Thursday) is expected out this week.
Crude traded higher from last week’s close, before dropping again to 107.90 levels at European open. Gold stabilizes above $810/oz. as Hurricane season in the US is in full swing. This week will see markets react to fundamentals and global commentary to Fannie and Freddie bail out, as we aren’t expecting very much in terms of economic news.
| Global indexes | Current level | % Change |
| Nikkei 225 Index | 12624 | 3.38 |
| Hang Seng Index | 20751 | 4.1 |
| Shanghai Index | 2143 | -2.68 |
| FTSE futures | 5274 | -2.32 |
| DAX futures | 6380 | 3.08 |
| DJIA futures | 11470 | 2.23 |
| Nasdaq futures | 1777 | -0.3 |
| World markets | Current level | % Change |
| Gold | 812.1 | 1.07 |
| Silver | 12.55 | 2.32 |
| VIX | 23.06 | -4.04 |
| Crude wti | 108.1 | 1.76 |
| USD Index | 78.66 | -0.34 |
| Todays calender | Estimates | Previous | Country / GMT |
| GBP PPI | -1.20% | -0.60% | GBP / 08:30 |
| GBP BRC Retail Sales Monitor | - | - | GBP / 23:01 |
Currency Tech
AUDUSD
R 3: 0.8628
R 2: 0.8534
R 1: 0.8394
CURRENT: 0.8308
S 1: 0.8031
S 2: 0.7893
S 3: 0.7675
EURJPY
R 3: 158.54
R 2: 158.46
R 1: 157.76
CURRENT: 155.44
S 1: 150.00
S 2: 149.23
S 3: 145.62
USDSGD
R 3: 1.4684
R 2: 1.4640
R 1: 1.4542
CURRENT: 1.4225
S 1: 1.4110
S 2: 1.4030
S 3: 1.3932
- S: Strong, M: Minor, T: Trendline, K: Keylevel, P: Pivot
Published on Mon, Sep 8 2008, 12:18 GMT
Archive
- Asian Session - Equity Selling Continues
Published On Tue, Dec 2 2008, 10:13 GMT - Asian Session - Markets Position for an Uncertain Week
Published On Mon, Dec 1 2008, 10:04 GMT - Japanese Industrial production fell by 3.1% m/m
Published On Fri, Nov 28 2008, 10:08 GMT - Asian Session - China's Aggressive Rate Cut Supports Asian Stock Markets
Published On Thu, Nov 27 2008, 10:14 GMT - Asian Session - Short Term Optimism Wanes - Back to Safe Haven Buying
Published On Wed, Nov 26 2008, 09:37 GMT
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