Market Brief
The Usd was moderately stronger in the Asian session, as equity markets took a tumble, prompting concerns that the crisis has not turned a corner. The EurUsd slipped from 1.3690 to 1.3536, while the UsdJpy fell from 102.19 to 101.13. Wall Street started the session higher and feeding the markets optimism, before dropping into negative territory, as weak US data was released (S&P closed -0.53%) and initial bailout package euphoria wears off. US corporate earnings downgrades weighed on the S&P500 and, which saw Eur, Aud and Nzd under renewed pressure and the Jpy and Usd bid. The VIX index remains stubbornly above 50, which suggests that despite extensive government and central bank attempt to grease the money and credit markets investors remain anxious. Asian equity markets are following and European stock futures are currently pointing to a mixed opening. Crude prices continued to decline, as optimism surrounding global demand wanes on a daily basis. A point to mention is how quickly the markets reacted to the negative US yesterday, perhaps a signal that fundamentals are back in focus as participant attempt to extrapolate the underlying economic effect of the crisis.
In the European session, we expect the Norge Bank to cut rates 50bp to 5.25%. Following Wednesday coordinated central bank action and the Norge Bank decision to move their monetary policy meeting up two weeks, there is little reason to deviate from consensus. However, there is growing speculation that a larger cut might be in the works, especially since a report Monday quoting Governor Gjedrem in saying rates need to come down lower than expectations.
In the UK, with the economy deteriorating and the uptick in claimant count, we expect Unemployment to pick up the pace over the last few months. And finally in the Eurozone the second estimate of CPI inflation should validate that inflation is indeed easing. The core driver behind the decline is expected to be a fall in energy price inflation.
| Global Indexes | Current Level | % Change |
| Nikkei 225 Index | 9,547.47 | 1.05 |
| Hang Seng Index | 16,210.02 | -3.7 |
| Shanghai Index | 1,994.67 | -1.12 |
| FTSE 100 Index | 4,365.50 | -1.08 |
| CAC 40 Index | 3,591.40 | -1.02 |
| SMI Index | 6,213.86 | -0.74 |
| DJIA futures | 9,294.00 | -0.74 |
| World Markets | Current Level | % Change |
| Gold | 846.48 | 1.16 |
| Silver | 10.98 | 0.13 |
| VIX | 55.13 | 0.25 |
| Crude wti | 79 | 0.47 |
| USD Index | 81.54 | 0.21 |
| Todays Calender | Estimates | Previous | Country / GMT |
| Unemployment Rate (Sep) | 2.90% | 2.80% | UK / 8.30 |
| CPI (Sep) | 0.1%(+3.6% | (+3.6%)p | EZ / 9.00 |
| Core CPI (Sep) | (+1.9%) | (+1.9%) | EZ / 9.00 |
| Norges Bank Interest Rate Announcement | 5.25% | 5.75% | NO / 12.00 |
| Producer Price Index (Sep) | -0.4%(+8.7 | -0.9%(+9.6 | US / 12.30 |
| Core Producer Price Index (Sep) | +0.2%(+3.8 | +0.2%(+3.6 | US / 12.30 |
| Retail Sales (Sep) | -0.70% | -0.30% | US / 12.30 |
| Empire State Manufacturing Index (Oct) | -10 | -7.4 | US / 12.30 |
| Business Inventories (Aug) | 0.50% | 1.10% | US / 14.00 |
| Fed’s Bernanke Speaks in New York | -- | -- | US / 16.15 |
Currency Tech
AUDUSD
R 3: 0.7425
R 2: 0.7357
R 1: 0.7239
CURRENT: 0.6954
S 1: 0.6872
S 2: 0.6435
S 3: 0.6331
EURJPY
R 3: 144.61
R 2: 144.97
R 1: 141.74
CURRENT: 137.64
S 1: 136.96
S 2: 134.23
S 3: 132.24
USDSGD
R 3: 1.4980
R 2: 1.4849
R 1: 1.4794
CURRENT: 1.4693
S 1: 1.4551
S 2: 1.4489
S 3: 1.4458
- S: Strong, M: Minor, T: Trendline, K: Keylevel, P: Pivot
