Market Brief
The US Equity markets continue to come under pressure, as financials declined by almost 10% and the S&P closed at levels not witnessed since the mid 1990s. Ahead of today's US NFP payrolls, risk aversion will be the core driver of prices. We expect the USD to stay supported in the current environment. With uncertainty regarding financial institutions, the survival of GM and disappointing data global investors will look for safe havens. The credit remains tight even as banks stay away from lending, although credit indicators such as the TED and LIBOR-OIS spreads are still less wide than in September 2008.
Yesterday, the ECB cut 50bp off the refinance rate as expected. ECB President Trichet stated that current 1.50% interest rate is not the lowest rate and has kept the door open for additional easing. In the UK, the BoE cut the official rate by 50bp as expected to an all-time low of 0.5%.Cutting through all the numbers, the BoE has now but quantitative easing in motion and will begin buying assets directly from private sources.
Still no direction mention of additional stimulus package from China's annual NPC meeting. Premier Wen, in his opening speech, stated the government will continue to target 8% growth this year. However, planning officials said today that more government investment is required to help drive growth this year. This lightly suggests some extra stimulus, but not guarantees it.
Markets are bracing for a whopper of a US labor numbers this afternoon (just when you thought it couldn't get worse). Incoming data suggest further deterioration in employment. There are creditable estimates which put the NFP at -780k (after falling almost 600k for the last 3 months).
| Global Indexes | Current Level | % Change |
| Nikkei 225 Index | 7,173.10 | - 3.50 |
| Hang Seng Index | 11,921.52 | - 2.37 |
| Shanghai Index | 2,286.58 | - 0.80 |
| FTSE 100 Index | 3,560.99 | + 0.88 |
| CAC 40 Index | 2,585.82 | + 0.63 |
| DAX Index | 3,720.20 | + 0.67 |
| DJIA futures | 6,642.00 | + 0.34 |
| World Markets | Current Level | % Change |
| Gold | 940.70 | + 1.39 |
| Silver | 13.46 | + 0.34 |
| VIX | 50.17 | + 0.23 |
| Crude wti | 43.71 | + 0.23 |
| Todays Calender | Estimates | Previous | Country / GMT |
| Non-farm Payrolls feb | -650k | -598k | US / 13.30 |
| Unemployment Rate feb | 7.9% | 7.6% | US / 13.30 |
| Average Hourly Earnings | 0.3% | 0.3% | US / 13.30 |
| Change in Manufactoring Payrolls feb | -200k | -207k | US / 13.30 |
| Fed Plosser Speaks on Financial System | -- | -- | US / 15.00 |
Currency Tech
AUDUSD
R 3: 0.6642
R 2: 0.6555
R 1: 0.6528
CURRENT: 0.6384
S 1: 0.6281
S 2: 0.6249
S 3: 0.6077
EURJPY
R 3: 126.51
R 2: 126.08
R 1: 1: 125.76
CURRENT: 122.94
S 1: 122.39
S 2: 121.75
S 3: 119.08
USDSGD
R 3: 1.5841
R 2: 1.5653
R 1: 1.5594
CURRENT 1.5486
S 1: 1.5437
S 2: 1.5286
S 3: 1.5130
- S: Strong, M: Minor, T: Trendline, K: Keylevel, P: Pivot
