Market Brief
Yesterday saw a concerted action by the major central banks to address the persistent problems in the financial markets. The US Federal Reserve announced that it would inject in the bond market $200bn while the ECB and the Swiss National Bank decided to increase the size of currency swaps put in action in December. On first glance it appears like the Fed is shifting away from traditional measures towards more specific remedies that are aimed at the problems. However, the two year swap spreads only marginally narrowed which shows that the measures were more a relief than a full fledged cure. The market reacted rather cautiously. While it recognized the utility and pertinence of these measures it also knows that one swallow does not make a summer.
Moreover, the markets had to contend with ECB director Trichet's comments stressing again that amid the present circumstances in the market the euro's strength could be detrimental to growth prospects. Knowing Trichet's staunch stand on inflation such repeated remarks confused investors who are yet to gauge the relative importance of inflationary pressure vis-à-vis growth prospective.
Having said this, the dollar had yet another bad trading session and the euro went to challenge again record highs. The euro rose to $1.5525 and also challenged the yen at Y158.65. The pound was also relatively feeble against the European currency as it moved back to £.7661.
the dollar's rally of Tuesday was almost completely wipped out as many investors still expect the Fed to be tempted to act on interest rates in the near future since the concerted action mentioned would more and more be viewed only as a palliative. This feeling was shared across the markets and continents and activated a sell off in the markets late in the session. The reaction was also coupled by talk that Eastern fund managers were heavily selling the greenback together with an announcement from Jordan that is was planning to reduce its portion of dollars in its reserves. The over all trend is still bearish - for the moment. For how long is still a moot question.
| Global Indexes | Current Level | % Change |
| Nikkei 225 Index | 12,433.44 | -3.33 |
| Hang Seng Index | 22,445.81 | -4.17 |
| Shanghai Index | 3,971.26 | -2.43 |
| FTSE futures | 5,765.00 | 1.24 |
| DAX futures | 6,494.00 | -1.65 |
| SMI Futures | 7,253.00 | 1.43 |
| DJIA futures | 11.992.00 | -1.09 |
| World Markets | Current Level | % Change |
| Gold | 988.23 | 0.54 |
| Silver | 20.38 | 1.09 |
| VIX | 27.22 | 3.26 |
| Crude wti | 109.91 | -0.01 |
| USD Index | 72.06 | -0.48 |
| Todays Calender | Estimates | Previous | Country / GMT |
| Import Price Index (MoM) (Feb) | 0.8% | 1.7% | US/12:30 |
| Initial Jobless Claims(Mar 8) | 355k | 351k | US/12:30 |
| Retail Sales (MoM)(Feb) | 0.2% | 0.3% | US/12:30 |
| SNB Interest Rate Decision | 2.75% | 2.75% | CH/13:00 |
Currency Tech
AUDUSD
R 3: 0.9421
R 2: 0.9385
R 1: 0.9333
CURRENT: 0.9308
S 1: 0.9147
S 2: 0.9122
S 3: 0.9006
EURJPY
R 3: 161.41
R 2: 159.22
R 1: 158.94
CURRENT: 158.45
S 1: 155.59
S 2: 154.88
S 3: 154.07
USDSGD
R 3: 1.4152
R 2: 1.4063
R 1: 1.3983
CURRENT: 1.3873
S 1: 1.3827
S 2: 1.3800
S 3: 1.3696
- S: Strong, M: Minor, T: Trendline, K: Keylevel, P: Pivot
