Market Brief
The Usd was weaker in the Asian session despite further declines in equity markets. The EurUsd traded higher from 1.2540 to 1.2676, while the UsdJpy, in choppy trading, moved between 97.00 and 97.75. Yesterday’s stock market session was dreadful with S&P down -4.66% (financial and energy sectors leading the way lower) and the Dow breaking levels not seen since 2002. Asian regional indexes are currently not fair much better. However, European stock futures point to a higher opening. VIX spiked higher above the 50 handle, while gold continues to slip. The uncertainty surrounding eastern Europe and the region's connection to the Eurozone should weigh on the euro and support the Usd (along with uncertainty and risk aversion).
In Australia , the RBA surprised the market by holding rates steady at 3.25%. Futures had priced a 30% probability of a 50bp cut and a 100% probability for a 25bp cut. The RBA cited the economy's resiliency and that it had not experienced the contraction seen in other countries. However, the central bank highlighted the fragile economic conditions and monetary policy will be reviewed in April's meeting, which in our eyes keeps the door open for further easing. Stating "On this basis, notwithstanding evident economic weakness at present, the Board judged that the stance of monetary policy was appropriate for the moment. The Board will consider the position again at its next meeting". And on the economic data front retail sales and exports both came in better than expected ( 0.2% vs. -0.5%exp,-6499m vs. -7350m exp. respectively). Aud bulls pushed the currency higher on the news with AudUsd swiftly moving from .6287 to .6452.
In Switzerland, Q4 GDP beat the analysts forecast printing at -0.3% q/q vs -0.8% exp. Given huge write-downs by Switzerland’s largest banks, financial services output, which account for a relatively high share of GDP, this should be viewed as a positive result.
From the US, Fed Chairman Bernanke’s testimony to the Senate Budget Committee is most likely to focus on fiscal policy. Unless he comments on monetary policy we dont see this being a market mover.
| Global indexes | Current level | % Change |
| Nikkei 225 Index | 7,229.72 | - 0.69 |
| Hang Seng Index | 12,033.88 | - 2.30 |
| Shanghai Index | 2,071.43 | - 1.05 |
| FTSE futures | 3,645.50 | + 0.88 |
| DAX futures | 3,738.00 | + 1.05 |
| SMI Futures | 4,461.00 | + 0.92 |
| DJIA futures | 6,869.00 | + 1.16 |
| World markets | Current level | % Change |
| Gold | 926.05 | -0.01 |
| Silver | 12.81 | -1.04 |
| VIX | 52.65 | 13.59 |
| Crude wti | 40.75 | 1.49 |
| USD Index | 88.43 | -0.57 |
| Todays calender | Estimates | Previous | Country / GMT |
| Construction PMI, index Feb | -- | 34.5 | UK / 9:28 |
| PPI, % m/m Jan | -0.2,0.6Y | -1.3,1.8Y | EZ / 10:00 |
| BoC interest rate announcement, % Mar | .50% | 1.00% | CA / 14.00 |
| Pending home sales, % m/m Jan | -3.0,-1.3Y | 6.3,2.1Y | US / 15.00 |
| Fed Chairman Ben Bernanke’s testimony to the Senat | -- | -- | US / 15.00 |
| Total vehicle sales, mn (saar) Feb | 9.6 | 10.2 | US / PM |
Currency Tech
AUDUSD
R 3: 0.6850
R 2. 0.6643
R 1: 0.6577
CURRENT: 0.6475
S 1: 0.6287
S 2: 0.6249
S 3: 0.6077
EURJPY
R 3: 128.55
R 2: 127.64
R 1: 126.08
CURRENT: 123.80
S 1: 121.75
S 2: 119.08
S 3: 117.91
USDSGD
R 3: 1.5841
R 2: 1.5653
R 1: 1.5594
CURRENT: 1.5487
S 1: 1.5286
S 2: 1.5130
S 3: 1.5043
- S: Strong, M: Minor, T: Trendline, K: Keylevel, P: Pivot
