Market Brief
The Usd was weaker in the Asian session, as risk appetite increased on the back of US initiatives. Wall Street's strong rally (lead by financials) carried over into Asia, as heavy risk buying is now driving down safe haven fx trades (Jpy, Chf, Usd). Yesterday's decision by the US Treasury, Fed and FDIC to support Citibank.. and the growing prospect of a second and more sizable fiscal stimulus being launched near term. was unmistakably being embraced by investors. In addition, President-elect Obama named his economic team, with NY Fed President Geithner as Treasury Secretary, Larry Summers will lead the National Economic Council and Christina Romer will run the Council of Economic Advisers, appointment which also has the markets support. Given the recent price action across asset classes, we see a positive trend in risk sentiment and traders should adjust strategies accordingly. The EurUsd traded to a high of 1.2959, while UsdJpy climbed to 97.43. Carry Trades initially rallied but failed to hold their positive momentum, as AudJpy traded up to 63.72 and then dropped to 61.51. Asian regional indexes are broadly higher, with the Nikkei up 5.22%, but European stock futures are pointing to a mixed open. Commodities are down slightly from yesterdayʼs strong rally, with crude wti trading at $53.27bll and spot gold $812.60oz. FX trading will be dominated by evolving global initiatives, which has been driving risk sentiment.
In European trading, markets we'll be watching out for the detailed release of German GDP (q3). While q2 was partly weather related, we expect todayʼs report (contraction of 0.5%) to be driven completely by deteriorating fundamentals. However, with Euro trading on more macro factors we donʼt expect this realization to have a significant effect of recent momentum.
| Global Indexes | Current Level | % Change |
| Nikkei 225 Index | 8,323.93 | 5.22 |
| Hang Seng Index | 12,779.65 | 2.58 |
| Shanghai Index | 1,888.72 | -0.44 |
| FTSE futures | 4,159.50 | 1.41 |
| DAX futures | 4,538.50 | -0.87 |
| SMI Futures | 5,455.00 | 5.92 |
| DJIA futures | 8,352.00 | -0.93 |
| World Markets | Current Level | % Change |
| Gold | 812.6 | -1.1 |
| Silver | 10.39 | -1.61 |
| VIX | 64.7 | -10.96 |
| Crude wti | 53.27 | 10.05 |
| USD Index | 86.1 | 0.01 |
| Todays Calender | Estimates | Previous | Country / GMT |
| GDP (Q3 Final) q/q(y/y) | -0.5%,+0.8 | -0.5,+0.8p | UK / 6.00 |
| GfK Consumer Confidence (Dec) | 1.5 | 1.9 | UK / 6.00 |
| ECB’s Bini Smaghi on ECB’s view of Europe’s Econom | -- | -- | EZ / 7.45 |
| GDP (Q3) q/q | 0.00% | 0.60% | NO / 8.00 |
| Business Investment (Q3 Prov) | -1.9%(-2.2 | -1.0%(+1.2 | UK / 8.30 |
| MPC Testifies to TSC on Inflation Report | -- | -- | UK / 8.45 |
| GDP (Q3 2nd Est.) (q/q Ann.) | -0.50% | -0.3%p | US / 12.30 |
| Case-Shiller National House Price Index (Q3) | -17.10% | -15.40% | US / 13.00 |
| Conference Board Consumer Conf. Index (Nov) | 38 | 38 | US / 14.00 |
| ECB’s Bini Smaghi in panel discussion on markets | -- | -- | EZ / 16.00 |
Currency Tech
AUDUSD
R 3: 0.6758
R 2: 0.6696
R 1: 0.6596
CURRENT: 0.6426
S 1: 0.6298
S 2: 0.6232
S 3: 0.6076
EURJPY
R 3: 131.04
R 2: 128.43
R 1: 126.21
CURRENT: 124.33
S 1: 119.54
S 2: 116.44
S 3: 115.00
USDSGD
R 3: 1.5684
R 2: 1.5436
R 1: 1.5345
CURRENT: 1.5153
S 1: 1.5055
S 2: 1.4965
S 3: 1.4875
- S: Strong, M: Minor, T: Trendline, K: Keylevel, P: Pivot
