Market Brief
The Usd was generally stable in the Asian session, after yesterday's significant decline, as risk appetite rallied. The EurUsd traded higher from 1.3140 to 1.3260, while the UsdJpy climbed from 89.00 to 89.88. The Usd, Jpy and Chf have been put on the back foot by a rash of optimism surrounding the stock market, squeeze of short positions and hawkish comments from ECB members. Yesterday, Timothy Geithner was confirmed by the US Senate as the new Treasury Secretary and his first order of business will be to determine whether a new government vehicle will be needed to hold illiquid and troubled assets, which presently weigh down the banking sector's balance sheets. And in other US news, President Obama $825bln stimulus package is expected to meet significant opposition in the US Senate. Despite the improvement in risk appetite, supported by a rally in equity and commodity prices, we expect this sentiment to fade quickly with capital moving back into safe haven trades (supported by an early collapse of gold prices). European equity markets are firm and US futures are pointing to a positive open.
The BoJ minutes from the December meeting clearly illustrated the mounting concern of BoJ members attributable to rapidly failing economic conditions. Members stating economic data were "deteriorating sharply" and conditions were "an emergency". Not really surprising, considering the collapse of recent economic data.
In the European session, the markets will be watching the German IFO survey. Markets are expecting business climate index to have fallen further to 81.0 in January from 82.6 in December. We expect the primary driver of the fall to be due to a decline in current conditions index, as manufacturing sector and construction falter. In a side note, ECB member Weber commented on the official rate, saying that economic data will determine the next move (in-line with Trichet's comments).
| Global Indexes | Current Level | % Change |
| Nikkei 225 Index | 8,061.07 | + 4.93 |
| FTSE 100 Index | 4,189.14 | - 0.47 |
| CAC 40 Index | 2,952.51 | - 0.09 |
| DAX Index | 4,332.65 | + 0.13 |
| SMI Index | 5,376.39 | - 0.75 |
| DJIA futures | 8,163.00 | + 1.58 |
| S&P future | 844.80 | + 1.68 |
| World Markets | Current Level | % Change |
| Gold | 894.37 | - 0.99 |
| Silver | 12.01 | - 0.49 |
| VIX | 45.69 | - 3.34 |
| Crude wti | 47.28 | + 3.38 |
| USD Index | 84.06 | - 0.78 |
| Todays Calender | Estimates | Previous | Country / GMT |
| IFO business climate, index Jan | 81.3 | 82.6 | GE / 9.00 |
| IFO current assessment, index Jan | 85.0 | 88.8 | GE / 9.00 |
| IFO business expectations, index Jan | 77.9 | 76.8 | GE / 9.00 |
| Current account, ¤bn (sa) Nov | -8.0 | -6.4 | E15 / 9.00 |
| CBI distributive trades, reported sales Jan | -53.0 | -55 | UK / 11.00 |
| S&P/Case-Shiller house price index, % y/y Nov | -18.0 | -18.0 | US / 14.00 |
| Consumer confidence, index Jan | 38.0 | 38.0 | US / 15.00 |
Currency Tech
AUDUSD
R 3: 0.7049
R 2: 0.6845
R 1: 0.6685
CURRENT: 0.6676
S 1: 0.6495
S 2: 0.6419
S 3: 0.6290
EURJPY
R 3: 125.29
R 2: 122.17
R 1: 118.82
CURRENT: 119.07
S 1: 113.75
S 2: 112.50
S 3: 112.10
USDSGD
R 3: 1.5335
R 2: 1.5249
R 1: 1.5120
CURRENT: 1.4964
S 1: 1.4925
S 2: 1.4810
S 3: 1.4759
- S: Strong, M: Minor, T: Trendline, K: Keylevel, P: Pivot
