Market Brief
The Usd was mixed in the Asian session, as equities markets continue to come under significant selling pressure. The EurUsd bounced around the 1.3100 – 1.2654 levels, while UsdJpy was relatively unchanged, trading between 98.03 and 96.80. Markets were unconvinced that the aggressive rate cuts by the SNB, BoE and ECB (50bp, 150bp, 50bp respectively) would have the desired effect in the near-term. However, we do expect that, ultimately, the trend of lower rates will have a positive impact on the global economy, clearly heading for a recession in 2009. The unprecedented move by the BoE by slashing 150bp to 3.00% was a signal that members view risks to inflation as low and risk to GDP as high. Wall Street took another fierce tumble yesterday, with S&P -5.02%, shaking any notion of an "Obama Bounce". Asian equity were undecidedly mixed on low volume and European indexes are trending lower. The correlation between equity markets / risk aversion and Usd is still well entrenched and will define todays trading pattern. Overall, redemption flow from risky assets into more liquid and safe US vehicles has benefited the greenback, and will continue as asset values maintain their downward decline.
Today's focus will be on the US October's employment data, which should provide the first real glimpse at how the trouble in the financial sector has spilt over into the real economy. Consensus for NFP is calling for a -200k reading (but analyst estimates vary greatly). However, with ADP reporting a higher than expected and surveys looking soft, risks are clearly skewed to the downside. In addition, unemployment is expected to rise to 6.4%, a 14-year high.
| Global Indexes | Current Level | % Change |
| Nikkei 225 Index | 8,583.00 | -3.55 |
| Hang Seng Index | 14,243.43 | 2.38 |
| Shanghai Index | 1,747.71 | 1.74 |
| FTSE 100 Index | 4,342.78 | 1.64 |
| DAX Index | 4,856.98 | 0.9 |
| SMI Index | 6,022.52 | 1.64 |
| DJIA futures | 8,860.00 | 1.83 |
| World Markets | Current Level | % Change |
| Gold | 741.43 | 1.57 |
| Silver | 10.28 | 2.9 |
| VIX | 63.68 | 16.71 |
| Crude wti | 62.02 | 2.07 |
| USD Index | 85.6 | -0.3 |
| Todays Calender | Estimates | Previous | Country / GMT |
| ECB Publishes Bank Lending Survey (Q4) | -- | -- | EZ / 8.00 |
| Industrial Production (Sep) | -1.7%,-0.5 | 3.4%,+1.7% | GE / 10.00 |
| Change in Non-Farm Payrolls (Oct) | -200K | -159K | US / 12.30 |
| Unemployment Rate (Oct) | 6.30% | 6.10% | US / 12.30 |
| Average Hourly Earnings (Oct) | 0.2%,+3.5 | 0.2%,+3.4 | US / 12.30 |
| Average Weekly Hours Worked (Oct) | 33.6 | 33.6 | US / 12.30 |
| Pending Home Sales Index (Sep) | -3.00% | 7.40% | US / 15.00 |
| Change in Consumer Credit (Sep) | $0.0bn | -$7.9bn | US / 19.00 |
Currency Tech
AUDUSD
R 3: 0.7357
R 2: 0.7240
R 1: 0.7065
CURRENT: 65.09
S 1: 0.6550
S 2: 0.6339
S 3: 0.6011
EURJPY
R 3: 131.50
R 2: 131.05
R 1: 127.07
CURRENT: 124.73
S 1: 122.25
S 2: 121.40
S 3: 113.65
USDSGD
R 3: 1.5160
R 2: 1.5147
R 1: 1.5079
CURRENT1.4936
S 1: 1.4645
S 2: 1.4585
S 3: 1.4555
- S: Strong, M: Minor, T: Trendline, K: Keylevel, P: Pivot
