Market Brief
The Usd was slightly stronger in Asian session, as markets ponder the effect of a change of US regime. The EurUsd traded from 1.3048 down to 1.2794, while the UsdJpy trended lower from 100.38 to 99.28. By lunch time in Asia, Obama's victory was confirmed, which fueled optimism for further economic stimulus and the Usd saw broad based buying, as gold and crude came under pressure. Although a win by now President elect Obama was widely expected and already discounted by financial markets, there was a level of uncertainty surrounding the US election. Pundits spent the last few hours vigorously debating what to expect next from the new President and still doubtful about filibuster-proof majority in the Senate. Our view is for participant to take a step back before making assumptions. It's critical to note that what was said on the campaign trail will change dramatically when faced with the reality of running a country in a dire condition. Obama will inherit a country in critical health, with the US economy entering a deep recession and soaring budget deficit which has not been seen in a generation. In the ultra short term, we expect the positive sentiment to carry over into risk appetite and the Usd. Regional equity indexes are all higher, with the Nikkei up 4.46%, but European stock futures are pointing lower. VIX continued to decrease and credit markets improved, with 3m Libor falling to 2.71%.
The next major event will be tomorrow's BoE and ECB rate announcement, but until then on the continent markets we will be watching Eurozone retail sales. We expect that the release will illustrate that spending growth continues to trend lower at a worrying rate. While August positive figure gave policy markets a slight reprieve, the annual rate remain very soft.
| Global indexes | Current level | % Change |
| Nikkei 225 Index | 9,521.24 | 4.46 |
| Hang Seng Index | 14,840.16 | 3.16 |
| Shanghai Index | 1,760.61 | 3.15 |
| FTSE 100 Index | 4,535.20 | -2.24 |
| DAX Index | 3,607.17 | -2.27 |
| SMI Index | 6,265.59 | -2.1 |
| DJIA futures | 9,463.00 | -1.29 |
| World markets | Current level | % Change |
| Gold | 752.25 | -1.44 |
| Silver | 10.18 | -0.39 |
| VIX | 47.73 | -11.08 |
| Crude wti | 67.28 | -4.6 |
| USD Index | 85.36 | 0.68 |
| Todays calender | Estimates | Previous | Country / GMT |
| PMI Services (Oct Final) | 46.9 | 46.9p | EZ / 8.00 |
| PMI Composite (Oct Final) | 44.6 | 44.6p | EZ / 8.00 |
| CIPS/Markit Report on Services (Oct) | 44.5 | 46 | UK / 8.30 |
| Industrial Production (Sep) | -0.2%,-2.2 | -0.6%,-2.3 | UK/ 8.30 |
| Manufacturing Output (Sep) | -0.3%,-1.6 | -0.4%,-1.9 | UK/ 8.30 |
| Retail Sales (Sep) | -0.4%,-2.2 | 0.3%,-1.8% | EZ / 9.00 |
| BRC Shop Price Index (Oct) | -- | 0.0%(+3.6 | UK / 9.30 |
| ADP Change in Employment (Oct) | -100K | -8K | US / 12.15 |
| ISM Non-Manufacturing Index (Oct) | 47 | 50.2 | US / 14.00 |
Currency Tech
AUDUSD
R 3: 0.7357
R 2: 0.7239
R 1: 0.7065
CURRENT: 0.6863
S 1: 0.6603
S 2: 0.6551
S 3: 0.6338
EURJPY
R 3: 135.11
R 2: 131.49
R 1: 131.06
CURRENT: 126.71
S 1: 123.42
S 2: 122.25
S 3: 121.42
USDSGD
R 3: 1.5039
R 2: 1.4948
R 1: 1.4874
CURRENT: 1.4796
S 1: 1.4647
S 2: 1.4585
S 3: 1.4554
- S: Strong, M: Minor, T: Trendline, K: Keylevel, P: Pivot
