Market Brief
The Usd was weaker in the Asian session, as fx traders lack the conviction to push markets in one direction. The EurUsd was range bound trading between 1.2580 to 1.2720, while the UsdJpy settled between 99.14 and 98.35. The Sterling was able to stabilize after yesterday's mass exodus, with the GbpUsd trading around 1.3850 and 1.3777 (with UK yields dropping significantly over the past few sessions and concerns over the UK banking sector we expect the Sterling to come under renewed pressure). The equity market sell-off continued, with the S&P500 finishing down 1.0% yesterday and Asian regional indexes are mixed with the Nikkei down by 0.4% and Hang Seng up 2.97% (partially due to the government probe in HSBC trading, which fell 24% yesterday). Crude prices continue to rise as markets have increased bets on an OPEC production cut. In the current climate, we continue to expect the greenback to stay supported, as US investors repatriate funds and risk-averse foreign investors continue to acquire safer, liquid US Treasury.
In Australia, business conditions in February fell 9 points, to -20 index points. This marks the weakest outcome since the early 90s. However, business confidence rose by 10 pts, to -22 index points (although still a vey weak level). The rise was concentrated in the retail, wholesale and transport sectors which all benefited from the government stimulus package.
In China, the CPI dropped 1.6% y/y, the first negative growth since December 2002, according to National Bureau of Statistics figures. The declining growth should keep inflation below China's 4% target, but should increase rapidly as China's economy gradually picks up the pace. Meanwhile, in Japan leading indicators for January fell slightly to 77.1 vs. 77.4 exp and 79.4 revised prior reading.
In the UK, the industrial production data will be the highlight of the European session. The release is expected to confirm that manufacturing recession is to be as severe as in the early 1980’s. Given the pressure on the Sterling in recent day, we expect this negative number will have an equally negative effect on the currency.
| Global Indexes | Current Level | % Change |
| Nikkei 225 Index | 7,054.98 | -0.43 |
| Hang Seng Index | 11,694.05 | 3.08 |
| Shanghai Index | 2,187.57 | 1.87 |
| FTSE 100 Index | 3,530.97 | -0.32 |
| DAX Index | 3,703.71 | 0.31 |
| SMI Index | 4,320.84 | 0.3 |
| DJIA futures | 6,622.00 | 1.44 |
| World Markets | Current Level | % Change |
| Gold | 910.6 | -1.23 |
| Silver | 12.78 | -1.71 |
| VIX | 49.68 | 0.71 |
| Crude wti | 47.08 | 0.02 |
| USD Index | 88.57 | -0.49 |
| Todays Calender | Estimates | Previous | Country / GMT |
| CPI, % m/m Feb | 0.3,2.1Y | -0.3,2.2Y | NO / 09:00 |
| Industrial production, % m/m Jan | -1.2 ,-10 | -1.7,-9.4Y | UK / 9:30 |
| Manufacturing output, % m/m | -1.4,-11.7 | -2.2,-10.2 | UK / 9:30 |
| GDP, % y/y Q4 | 1.3 | 6.8 | BRL / 12:00 |
| Wholesale inventories Jan | -1.0,1.5Y | -0.9,3.4Y | US / 14:00 |
| Corporate goods price index, % y/y | -1.2 | -0.2 | JP / 23:50 |
| Core machinery orders, % m/m Jan | -5 | -1.7 | JP / 23:50 |
Currency Tech
AUDUSD
R 3: 0.6555
R 2: 0.6528
R 1: 0.6470
CURRENT: 0.6413
S 1: 0.6280
S 2: 0.6250
S 3: 0.6077
EURJPY
R 3: 126.51
R 2: 126.08
R 1: 125.75
CURRENT: 125.41
S 1: 122.38
S 2: 121.75
S 3: 119.08
USDSGD
R 3: 1.5840
R 2: 1.5653
R 1: 1.5595
CURRENT: 1.5395
S 1: 1.5410
S 2: 1.5285
S 3: 1.5130
- S: Strong, M: Minor, T: Trendline, K: Keylevel, P: Pivot
