Market Brief
The Usd was stronger in the Asian Session, as risk appetite faded. The EurUsd traded lower from 1.2950 to 1.2866, while the UsdJpy fell from 90.00 to 89.20. We are noticing a slight divergence in trader's preference during boats of risk aversion. With heavy selling of the Eur while the Cad and Gbp are attracting buyers against the USD (and even more against the JPY). This could be in part due to jerky market conditions, due to thin liquidity and lack of conviction by traders. Yesterday's Wall Street session closed lower, as financials and weaker than expected US data weighed on sentiment. US new homes sales fell from 388k to a new record low of 331k (vs 405k exp), which suggests that house prices have further to decline. And US durable goods fell 2.6% m/m, echoing the widespread slump in demand, both domestically and from abroad. Early in the European session we are seeing pressure continuing on risky assets, with both Asian and European stock markets in the red.
In Japan, the economic data released was a real eye opener. Industrial production in Japan fell -9.6% m/m in December. A clear illustration on how the deteriorating global demand is disturbing the Japanese domestic economy .In addition, construction orders slid 27.3% y/y pushed by a -5.8% y/y collapse in housing starts. Vehicle production fell 25.2% y/y (representative of the global automotive industry). December's unemployment rate came in at 4.4%, vs. 4.1%. With Jpy still trading on risk aversion (but getting a lower push) and corporate and investor repatriation flows, the Jpy will continue to be supported. However, as risk appetite returns to the market and growth once again become the focus, we expect the Jpy to be sold heavily.
Today's US first estimate of fourth-quarter GDP will capture the markets attention. Market expect that real GDP contracted by 5.5% at an annualized pace. If correct, this will be the biggest quarterly drop in more than 25 years.
| Global Indexes | Current Level | % Change |
| Nikkei 225 Index | 7,994.05 | - 3.11 |
| Hang Seng Index | 13,278.21 | + 0.94 |
| FTSE 100 Index | 4,222.18 | + 0.76 |
| CAC 40 Index | 3,025.59 | + 0.50 |
| DAX Index | 4,450.59 | + 0.50 |
| SMI Index | 5,315.65 | + 0.81 |
| DJIA futures | 8,153.00 | + 0.50 |
| World Markets | Current Level | % Change |
| Gold | 920.10 | + 1.26 |
| Silver | 12.53 | + 1.25 |
| VIX | 42.63 | + 7.48 |
| Crude wti | 41.78 | + 0.82 |
| USD Index | 85.74 | + 0.54 |
| Todays Calender | Estimates | Previous | Country / GMT |
| BoE mortgage approvals, K Dec | 26 | 27 | UK / 9.30 |
| BoE mortgage lending, £ bn Dec | 0.6 | 0.7 | UK / 9.30 |
| BoE net consumer credit, £bn Dec | 0.7 | 0.8 | UK / 9.30 |
| Flash" HICP, % y/y Jan | 1.4 y/y | -0.1,1.6 Y | EZ / 10.00 |
| Unemployment rate, % (sa) Dec | 7.9 | 7.8 | EZ / 10.00 |
| GDP, % m/m Nov | -0.4 | -0.1 | CA / 13.30 |
| GDP, % q/q saar Q4-A | -5.0,-0.5Y | -0.5,0.7Y | US / 13.30 |
| GDP price index, % q/q saar Q4-A | 0.4,2.0Y | 3.9,2.6Y | US / 13.30 |
| Employment cost index, % q/q Q4 | 0.7,2.9Y | 0.7,3.0Y | US / 13.30 |
| Chicago PMI, index Jan | 34.2 | 35.1 | US / 14.45 |
| U. Michigan consumer sentiment, index Jan-f | 61.9 | 61.9 | US / 14.55 |
Currency Tech
AUDUSD
R 3: 0.6844
R 2: 0.6732
R 1: 0.6682
CURRENT: 0.6443
S 1: 0.6418
S 2: 0.6291
S 3: 0.6077
EURJPY
R 3: 122.17
R 2: 119.56
R 1: 116.68
CURRENT: 115.08
S 1: 114.97
S 2: 113.75
S 3: 112.52
USDSGD
R 3: 1.5336
R 2: 1.5249
R 1: 1.5120
CURRENT: 1.5088
S 1: 1.4924
S 2: 1.4809
S 3: 1.4759
- S: Strong, M: Minor, T: Trendline, K: Keylevel, P: Pivot
