Market Brief
The Usd started this trading week with a slightly bullish tone. Asian regional equity are lower after a tough week for global equity markets. The EurUsd traded down from 1.2728 to 1.2614, while the UsdJpy, in choppy trading, jumped between 97.90 and 98.54. US treasury yields rose in spite of falling inflation, suggesting demand for higher risk premium. Gold and Crude continue to rally, as markets anticipate gold to absorb the aversion to paper currencies and worries OPEC will cut production. Friday's February US payrolls fell by -651k highlighting the sever deterioration in the US labor markets. Since September 2008, the Usd has benefited from risk aversion as investors search for the safest and most liquid assets and we expect in these uncertain days the greenback will remain firm. However we have noticed that link between risk aversion & Usd seems to be weakening (FX & Equity Correlations). This light week for economic data investors will be focused on event risks specifically Europe’s banking sectors exposure to Eastern Europe and bailout developments in the US .
In Japan, data on foreign & domestic securities trading in February showed that Japanese investors remained large net buyers of foreign shares and bonds, while foreign investors continued to sell Japanese shares. In addition, the current account moved into deficit at -¥172.8 bn in January for the first time since January 1996 (-¥25.6 bn).
While the RBA decided to pause last week, we (and markets) expect the RBNZ to cut rates 75bp to 3.25% (however, there is creditable risk the RBNZ cuts only 50bp). The economic outlook in New Zealand has deteriorated further promoting additional monetary easing.
| Global Indexes | Current Level | % Change |
| Nikkei 225 Index | 7,086.03 | -1.21 |
| Hang Seng Index | 11,657.70 | -2.21 |
| Shanghai Index | 2,118.75 | -3.38 |
| FTSE 100 Index | 3,530.73 | 0.02 |
| CAC 40 Index | 2,534.45 | -1.35 |
| SMI Index | 4,311.61 | -1.76 |
| DJIA futures | 6,643.00 | -0.46 |
| World Markets | Current Level | % Change |
| Gold | 934.75 | -0.48 |
| Silver | 13.2 | -1.34 |
| VIX | 49.33 | -1.67 |
| Crude wti | 46.15 | 1.38 |
| USD Index | 88.7 | 0.21 |
| Todays Calender | Estimates | Previous | Country / GMT |
| Unemployment rate, % (sa) Feb | 3 | 2.9 | SZ / 6.45 |
| ECB Executive Board member Stark speaks at the Lux | -- | -- | EZ / 9:00 |
| NZIER Business Confidence Index Q1 | -- | -64 | NZ / 21:00 |
Currency Tech
AUDUSD
R 3: 0.6640
R 2: 0.6555
R 1: 0.6529
CURRENT: 0.6397
S 1: 0.6281
S 2: 0.6250
S 3: 0.6077
EURJPY
R 3: 126.50
R 2: 126.08
R 1: 125.75
CURRENT: 124.38
S 1: 122.38
S 2: 121.75
S 3: 119.10
USDSGD
R 3: 1.5840
R 2: 1.565
R 1: 1.5594
CURRENT: 1.5460
S 1: 1.5410
S 2: 1.5285
S 3: 1.5130
- S: Strong, M: Minor, T: Trendline, K: Keylevel, P: Pivot
