Market Brief
Risk appetite dropped sharply due primarily to the lack of specifics in the US Treasury's bank bailout package, now titled "The Financial Stability Plan" and provided no real positive surprises. Usd & Jpy outperformed the rest of the G10 currencies, with the hardest hit being the Sterling. In addition to the sell off of banking shares in light of the US plan discussed above, Treasury select committee hearings cast further bad light on the UK banking system.
Markets responded gloomily to Treasury Secretary Geithner's new Financial Stability Plan, with stock market broadly lower (S&P down 4.95%) while risky currencies were sold off. Interestingly, the financial and energy sectors were the two hardest hit, as a pure reflections of investors concern surrounding the global economic slowdown and the financial crisis. The Financial Stability Plan combines the Treasury, the Fed and the FDIC to "attack the credit crisis on all fronts." But, while sounding proactive and aggressive, the lack of specifics leaves us feeling unconvinced.
Yesterday, ECB member Axel Weber seemed to shift his rhetoric sharply stating the ECB should begin cutting rates aggressively in order to stave off a further economic deterioration. And we are beginning to hear other ECB members starting to sing the same tune. ECB member Quaden stated the ECB was ready to ease rates in March and a majority of the members had no objections to further loosing of monetary policy. While the market shrugged off these important remarks, should the noise increase we should see a real effect on Euro pricing.
Sweden’s Riksbank cut 100bp (vs 75bp exp) to 2.00% Australia’s Westpac feb. Consumer confidence fell -4.6% vs -2.2% exp. Home loans dec. rose 6.4% vs. 1.3% exp. German Consumer Price Index janF m/m was inline at -0.5% vs. -0.5% exp, y/y 0.9% vs. 0.9% exp
| Global Indexes | Current Level | % Change |
| Nikkei 225 Index | 7,945.94 | - 0.29 |
| Hang Seng Index | 13,539.21 | - 2.46 |
| Shanghai Index | 2,260.82 | - 0.19 |
| FTSE 100 Index | 4,207.14 | - 0.14 |
| DAX Index | 4,500.16 | - 0.11 |
| SMI Index | 5,106.06 | - 0.75 |
| DJIA futures | 7,900.00 | + 0.27 |
| World Markets | Current Level | % Change |
| Gold | 917.50 | + 0.26 |
| Silver | 13.30 | + 1.10 |
| VIX | 46.67 | + 6.93 |
| Crude wti | 38.12 | + 1.51 |
| USD Index | 85.43 | - 0.44 |
| Todays Calender | Estimates | Previous | Country / GMT |
| Sweden: Riksbank: Interest rate announcement, % Fe | 1.25% | 2.00% | SZ / 8.30 |
| BoE Inflation report published | -- | -- | UK / 9.30 |
| Claimant count unemployment, change K Jan | 85.0 | 77.9 | UK / 9.30 |
| Average earnings, % 3m/y Dec | 3.0 | 3.1 | UK / 9.30 |
| Core average earnings, % 3m/y Dec | 3.5 | 3.6 | UK / 9.30 |
| Int'l Merchandise Trade, C$bn Dec | 0.8 | 1.3 | CA / 13.30 |
| Trade balance, $ bn Dec | -37.0 | -40.4 | US / 13.30 |
| FRB of Chicago President Evans (FOMC voter) speaks | -- | -- | US / 18.00 |
| Executive Board member Tupel Gugerell-speaks at an | -- | -- | EZ / 18.00 |
| Budget balance, $ bn Jan | -75.0 | 17.8 | US / 19.00 |
| ECB Vice-President Papademos speaks at the Annual | -- | -- | EZ / 21.30 |
Currency Tech
AUDUSD
R 3: 0.7003
R 2: 0.6849
R 1: 0.6799
CURRENT: 0.6533
S 1: 0.6476
S 2: 0.6355
S 3: 0.6249
EURJPY
R 3: 122.17
R 2: 121.57
R 1: 120.01
CURRENT: 116.51
S 1: 115.71
S 2: 114.22
S 3: 113.15
USDSGD
R 3: 1.5338
R 2: 1.5258
R 1: 1.5178
CURRENT: 1.5056
S 1: 1.4935
S 2: 1.4904
S 3: 1.4805
- S: Strong, M: Minor, T: Trendline, K: Keylevel, P: Pivot
