Market Brief
The Usd continued to gain strength in the Asian session, as risk aversion trade remained active. The EurUsd traded from1.3417 down to 1.3233, while the UsdJpy stayed within a 89.50 to 89.00 range. AudJpy, currently acting as a decent gauge of risk appetite, slipped below the 60 handle for the first time in 2009. Yesterday, Wall Street had another negative closing, with S&P down by 2.25% and weakness in crude prices weighed on commodity prices. Elsewhere, after both Greece and Ireland were warned by S&P that their credit rating was at risk, Spain and New Zealand received a similar warning (News that weighed heavily on their respective currencies). While credit conditions seem to be stabilizing, the general pessimistic outlook surrounding the markets will keep Usd, Chf and Jpy supported near term.
In Japan, December's Japan Economy Watcher’s Survey was released, dropping to another low. Perhaps the most worrying aspect of the report was the drop of consumer sentiment from the consumer side, which fell to 18.2. This was the fifth straight decline and as leading indicator of consumption, which makes up almost 60% of GDP, paints a steeper economic deterioration than anticipated. With sentiment, wages, and the job market under siege, we don’t except any bright spots in the foreseeable future.
In Australia, NZIER quarterly survey of business opinion highlighted further weakness in economic conditions in the final quarter of 08. Business confidence printed its weakest reading in 34 years. In addition business activity, expected and investment intentions dropped to a new lows. The bleak reading combined with the S&P revised outlook on NZ foreign currency credit rating from stable to negative, pushed NzdUsd lower by 4.0%
With a light economic calendar in Europe, markets will be waiting for comments from Fed Chairman Bernanke, who is expect to talk at the London School of Economics on “The crisis and the policy response”.
| Global indexes | Current level | % Change |
| Nikkei 225 Index | 8,413.91 | -4.78 |
| Hang Seng Index | 13,668.05 | -2.16 |
| Shanghai Index | 1,863.37 | -1.94 |
| FTSE 100 Index | 4,379.21 | -1.06 |
| CAC 40 Index | 3,206.22 | -1.22 |
| SMI Index | 5,533.20 | -1.04 |
| DJIA futures | 8,419.00 | -0.29 |
| World markets | Current level | % Change |
| Gold | 821.1 | 0.03 |
| Silver | 10.66 | -0.04 |
| VIX | 45.84 | 7.05 |
| Crude wti | 36.38 | -3.21 |
| USD Index | 83.71 | 0.83 |
| Todays calender | Estimates | Previous | Country / GMT |
| Trade balance, £bn | -7.5 | -7.8 | UK / 9.30 |
| DCLG house prices, % y/y | -- | -7.4 | UK / 9.30 |
| Int'l merchandise trade, C$bn | 3.3 | 3.8 | CA / 13.30 |
| Trade balance, $bn | -52 | -57.2 | US / 13.30 |
| Budget balance, $bn | -42.5 | -164.4 | US / 19.00 |
| Fed Chairman Bernanke Seaks | -- | -- | US / 13.00 |
Currency Tech
AUDUSD
R 3: 0.7142
R 2: 0.7042
R 1: 0.6820
CURRENT
S 1: 0.6739
S 2: 0.6666
S 3: 0.6612
EURJPY
R 3: 126.52
R 2: 125.28
R 1: 121.86
CURRENT
S 1: 117.54
S 2: 115.88
S 3: 113.64
USDSGD
R 3: 1.5114
R 2: 1.5010
R 1: 1.4942
CURRENT
S 1: 1.4755
S 2: 1.4675
S 3: 1.4502
- S: Strong, M: Minor, T: Trendline, K: Keylevel, P: Pivot
