Market Brief
The Usd was significantly weaker in the Asian session, as equity markets reacted positively to the G10 central banks (& US Treasury) plan. The EurUsd traded from 1.3499 up to 1.3695, while the UsdJpy traded from 100.96 to 103.06. Even the Gbp & Aud currencies, that took a pounding in the last month, bounced back with the GbpUsd and the AudUsd rising to 1.7555 and 0.7121 respectively. The gainers in percentage terms were EM currencies, followed by commodity currencies. The JPY and CHF are the only losers versus USD overnight, as risk aversion eased. The big story was the massive comeback of the equity markets. Yesterday, the European markets started the positive trend, with the CAC 40 closing up 11.17%. Then, Wall Street following with a stellar day with the S&P, closing up 11.58%. Currently Asia equity markets are trading higher, with the Nikkei up 14.15%. Overall, the trading patterns indicate that participants are more confident of market stability. We expect this trading pattern will continue during the day in FX markets (keep your eyes on Jpy funded carry trades).
In Japan, the domestic corporate goods price index (CPGI) in September slowed to +6.8% vs. 7.2% in August y/y (slightly above exp 6.6%). The slowdown was already priced in since it was primary a result of crude oil price decline.
In the European session German ZEW investor sentiment index is expected to drop for its already low level. the severe downturn in financial market conditions, since last reading surprise uptick, should have caused a renewed decline, considering that German banks are right in the thck of thngs. ECB President Trichet will give a speech at the Economic Club of New York today at 16.15gmt
Markets trading patterns will be critical today, as the US market returns from the one day holiday. The traders will be watching a press conference by US Treasury Sec Paulson, Bernanke and the FDIC's Bair shortly before the US equity markets open. While the positive sentiment benefits the Eur in the ultra short run over the longer term, evolving rate differentials should be supportive of the US dollar, since the European countries have to address their slowing growth and must cut rates further.
| Global indexes | Current level | % Change |
| Nikkei 225 Index | 9,446.57 | 14.15 |
| Hang Seng Index | 16,822.40 | 3.12 |
| Shanghai Index | 2,017.40 | -2.71 |
| FTSE 100 Index | 4,437.43 | 4.24 |
| CAC 40 Index | 3,677.96 | 4.14 |
| SMI Index | 6,176.51 | 3.61 |
| DJIA futures | 9,562.00 | 0.56 |
| World markets | Current level | % Change |
| Gold | 843.87 | 1.29 |
| Silver | 10.93 | 2.1 |
| VIX | 54.99 | -21.38 |
| Crude wti | 83.7 | 3.09 |
| USD Index | 81.29 | -0.73 |
| Todays calender | Estimates | Previous | Country / GMT |
| Ger ZEW Economic Sentiment (Oct) | -51.1 | -41.1 | GE / 9.00 |
| Industrial Production (Aug) | 1.2%,-1.6% | -0.3%,-1.7 | EZ / 9.00 |
| Monthly Budget Statement (Sep) | +$45.0bn | +$112.9bn | US / 18.00 |
Currency Tech
AUDUSD
R 3: 0.7357
R 2: 0.7157
R 1: 0.7120
CURRENT: 0.7045
S 1: 0.6437
S 2: 0.6331
S 3: 0.6245
EURJPY
R 3: 144.61
R 2: 144.97
R 1: 141.07
CURRENT: 139.74
S 1: 134.23
S 2: 132.24
S 3: 130.62
USDSGD
R 3: 1.4980
R 2: 1.4849
R 1: 1.4794
CURRENT: 1.4612
S 1: 1.4551
S 2: 1.4489
S 3: 1.4458
- S: Strong, M: Minor, T: Trendline, K: Keylevel, P: Pivot
