Market Brief
The Usd was stronger in the Asian session, as risk aversion crept back into the markets. The EurUsd was stable for most of Asia, before collapsing from 1.3000 to 1.2808 in late session trading. The Jpy continues to show strong momentum, with UsdJpy trading from 89.35 to 88.17. Yesterday’s weak Wall Streets session has spilled over into Asian, with all regional indexes trading lower. European equity markets are currently not fairing much better. Volatility continues to increase both in FX implied vols and VIX index. Yesterday, the Central Bank of Russia announced an end to its measured devaluation strategy and placed the RUB basket trading band at 41.0 and 26.0 (upper band implies more than 10% depreciation from the current spot price). Cleverly, they also stated further adjustments to the band would depend on the price of oil. Tim Geithner restated the Treasury's strong USD policy & he also stated President Obama believes China is manipulating its currency and will look for FX policy changes.
The BoJ left the official rate unchanged at 0.10% as expected, while cutting its growth forecasts through March 2010 (in the interim update of its semi-annual ”Outlook for Economic Activity and Prices”.) Economic indicators released showed exports in December fell by 35% y/y, and the Tankan business confidence survey was -76 (vs. previous -64). The data just highlights the fact that the real economy will stay under considerable pressure in 2009 and we will be looking for opportunity to sell Jpy.
In the European session, UK's major release today is the preliminary estimate of Q4 GDP. Business surveys point to a contraction in GDP in Q4 that was even larger than the 0.6% q/q fall seen in Q3. At the same time, we expect retail sales figures to show a drop of -0.7%. These data are likely to add to the perceived weakness of the UK economy and to the downward pressure on the Sterling. While on the continent, German and Eurozone PMI figures expected to show further deterioration across both the manufacturing and services sectors.
| Global Indexes | Current Level | % Change |
| Nikkei 225 Index | 7,745.25 | -3.8 |
| Hang Seng Index | 12,578.60 | -0.67 |
| Shanghai Index | 1,990.66 | -0.71 |
| FTSE 100 Index | 4,037.49 | -0.36 |
| CAC 40 Index | 2,868.00 | -0.19 |
| SMI Index | 5,339.85 | 0.19 |
| DJIA futures | 7,956.00 | -1.61 |
| World Markets | Current Level | % Change |
| Gold | 856.11 | - 0.10 |
| Silver | 11.39 | - 0.21 |
| VIX | 47.29 | + 1.87 |
| Crude wti | 42.34 | - 3.02 |
| USD Index | 86.40 | + 1.03 |
| Todays Calender | Estimates | Previous | Country / GMT |
| Flash" manufacturing PMI, index | 32.0 | 32.7 | GE / 8.30 |
| Flash" services PMI, index Jan | 45.3 | 46.6 | GE / 8.30 |
| Flash" manufacturing PMI, index Jan | 33.2 | 33.9 | EZ / 9.00 |
| Flash" manufacturing PMI, input prices index Jan | -- | 32.8 | EZ / 9.00 |
| Flash" services PMI, index | 41.5 | 42.1 | EZ / 9.00 |
| Flash" composite PMI, index | 38.0 | 38.2 | EZ / 9.00 |
| GDP - first estimate, % q/q Q4 | -1.2 | -0.6 (Q3) | UK / 9.30 |
| Retail sales, % m/m Dec | -0.6 | 0.3,1.5Y | UK / 9.30 |
| Consumer Price Index, % y/y Dec | -- | 2.0 | CA / 12.00 |
| Bank of Canada core CPI, % y/y | .. | 2.4 | CA / 12.00 |
Currency Tech
AUDUSD
R 3: 0.7048
R 2: 0.6841
R 1: 0.6684
CURRENT: 0.6461
S 1: 0.6457
S 2: 0.6294
S 3: 0.6077
EURJPY
R 3: 122.17
R 2: 118.82
R 1: 117.21
CURRENT: 113.46
S 1: 113.99
S 2: 112.10
S 3: 111.30
USDSGD
R 3: 1.5339
R 2: 1.5265
R 1: 1.5120
CURRENT: 1.5074
S 1: 1.4921
S 2: 1.4805
S 3: 1.4759
- S: Strong, M: Minor, T: Trendline, K: Keylevel, P: Pivot
