Market Brief
The Usd was slightly stronger in the Asian session, as investors positioned themselves for a data heavy week. In the US, Black Friday's initial sales reports were unconvincing (but slightly on the positive side) and data released this week is expected to show continued deterioration. The EurUsd and UsdJpy came under significant selling pressure on Friday and the trend seems to be continuing in Asia. The EurUsd traded down from 1.2721 to 1.2622, while the UsdJpy traded from 95.60 to 95.18. Last week's equity trading was relatively postive and stable, while government yields declined. Asian regional equity indexes are mixed, while European stock futures are pointing to a lower opening. Interestingly, crude prices are lower despite the OPEC meeting, which didn't cut production but will wait till the end of month meeting, illustrating investors fears are directed at the weak demand caused by the global recession, above production/supply concerns.
This week, markets will be focused on the aggressive rate cuts from central banks. Our base scenario is that the cuts will give equities some level of support and, therefore, weaken Usd and Jpy. The big meetings will be Thursday's BoE and ECB policy rate decisions. We are expecting 100bp & 75bp respectively, which is slightly more aggressive than the current market expectations. Earlier in the week, we expect the RBA to cut 100bp and RBNZ a whopping 150bp rate cut. Both should take the market by surprise and weigh on the Aud and Nzd (less so for Aud).
| Global indexes | Current level | % Change |
| Nikkei 225 Index | 8,397.22 | -1.35 |
| Hang Seng Index | 14,160.10 | 1.95 |
| Shanghai Index | 1,894.62 | 1.24 |
| FTSE futures | 4,287.00 | 0.83 |
| DAX futures | 4,656.50 | -0.27 |
| SMI Futures | 5,790.00 | -0.43 |
| DJIA futures | 8,741.00 | -0.9 |
| World markets | Current level | % Change |
| Gold | 807.45 | -1.29 |
| Silver | 10.14 | -1.54 |
| VIX | 55.28 | 0.65 |
| Crude wti | 52.72 | -3.14 |
| USD Index | 86.58 | 0.06 |
| Todays calender | Estimates | Previous | Country / GMT |
| BoE Mortgage Approvals (Oct) | 32k | 33k | UK / 8.30 |
| Consumer Credit (Oct) | +£0.5bn | +£0.3bn | UK / 8.30 |
| CIPS/Markit Report on Manufacturing (Nov) | 39.7 | 41.5 | UK / 8.30 |
| GDP (Q3 1st Est.) (q/q Ann.) | 0.80% | 0.30% | CA / 12.30 |
| Construction Spending (Oct) | -0.90% | -0.30% | US / 14.00 |
| ISM Manufacturing Index (Nov) | 37.5 | 38.9 | US / 14.00 |
| Fed’s Bernanke Speaks On Economic Outlook | -- | -- | US / 17.30 |
Currency Tech
AUDUSD
R 3: 0.6758
R 2. 0.6696
R 1: 0.6618
CURRENT: 0.6447
S 1: 0.6333
S 2: 0.6232
S 3. 0.6077
EURJPY
R 3: 126.24
R 2: 124.63
R 1: 123.67
CURRENT: 120.63
S 1: 119.55
S 2: 116.43
S 3: 113.64
USDSGD
R 3: 1.5436
R 2: 1.5345
R 1: 1.5248
CURRENT: 1.5212
S 1: 15052
S 2: 1.4965
S 3: 1.4875
- S: Strong, M: Minor, T: Trendline, K: Keylevel, P: Pivot
