Market Brief
The Usd was weaker in the Asian session for the second day in a row US data release surprised to the upside and supported risk taking. The EurUsd traded between 1.2949 and 1.3070, while the UsdJyp fell sharply from 89.69 to 88.83. Risk sentiment was supported by a plethora of positive news: stimulus packages were announced in Australia and Sweden, the BoJ indicated its intent to buy stocks held by Japanese banks, US pending home sales figures for December rose by 6.3% and Fed's announced that five emergency lending programs are to be extended by 6 months. These events helped US equity markets to close in positive sentiemnt and were carried over into today. USD activity overnight were related to buzz arround a proposed bill allowing US corporates a major tax discount on repatriated earnings from abroad.
In Australia, seasonally adjusted retail sales jumped by a whopping 3.8% in December. The data includes the one-off $8.4bn fiscal stimulus package but highlights the fact that consumers felt confidence to spend rather than save.
We are in line with the near-unanimous consensus in forecasting the Norges Bank to lower rates 50bp, to 2.5%, (followings Dec 175bp cut) .Given the deterioration in the global economic outlook there is increased probability of a larger cut.
Today brings service sector PMI data, Eurozone retail sales, US mortgage applications and the ADP employment report. We expect the weak data to hinder growing optimism and support Usd buying. The US labour market has been sheding jobs at a unprecedented pace, bringing a downside risk to the consensus expectation in todays ADP report.
| Global Indexes | Current Level | % Change |
| Nikkei 225 Index | 8,038.94 | + 2.72 |
| Hang Seng Index | 13,063.89 | + 2.24 |
| Shanghai Index | 2,107.75 | + 2.27 |
| FTSE 100 Index | 4,171.13 | + 0.16 |
| SMI Index | 5,196.06 | - 0.40 |
| DAX Index | 4,385.86 | + 0.24 |
| DJIA futures | 7,999.00 | + 0.16 |
| World Markets | Current Level | % Change |
| Gold | 898.12 | - 0.15 |
| Silver | 12.38 | - 0.48 |
| VIX | 43.06 | - 5.04 |
| Crude wti | 40.82 | + 0.09 |
| USD Index | 85.43 | + 0.44 |
| Todays Calender | Estimates | Previous | Country / GMT |
| BoE MPC policy meeting starts (to Feb 5) | -- | -- | UK / -- |
| PMI services, index | 40.2 | 40.0 | UK / 9.28 |
| Retail sales, % m/m | -0.3,-1.5Y | -1.0,-2.3Y | EZ / 10.00 |
| Norway: Norges bank interest rate announcement, % | 2.50% | 3.00% | NO / 13.00 |
| ADP private employment change, thous | -515 | -476 | US / 13.15 |
| ISM non-mfg composite, index | 39.0 | 37.4 | US / 15.00 |
Currency Tech
AUDUSD
R 3: 0.6844
R 2: 0.6732
R 1: 0.6546
CURRENT: 0.6437
S 1: 0.6249
S 2: 0.6077
S 3: 0.6011
EURJPY
R 3: 122.17
R 2: 119.56
R 1: 116.68
CURRENT: 115.33
S 1: 113.15
S 2: 112.52
S 3: 112.12
USDSGD
R 3: 1.5312
R 2: 1.5249
R 1: 1.5178
CURRENT: 1.5090
S 1: 1.5029
S 2: 1.4924
S 3: 1.4809
- S: Strong, M: Minor, T: Trendline, K: Keylevel, P: Pivot
