Market Brief
The Usd was weaker in the Asian Session, as a wave of positive risk sentiment drove the financial markets. The EurUsd traded higher to 1.3678 from 1.3603, while the UsdJpy jumped from 96.70 to 98.40, which is consistent with the overall trend of positive risk appetite. The AudUsd broke though the 0.7000 resistance heading to a 0.7095 session high. Asian EM currencies continue to make strong gains, with the CNY forward curve now signaling appreciation for the first time in 6 months. Equity markets experienced a strong correction to the upside with the Dow higher by 6.8% or 497pts, a serious relief for investors seeking a positive result from the recent economic reform plans. Asian equity markets are all trading slightly higher and European stock futures are pointing to a big open. Bond yields showed marginal increased across the UST curve, a bit surprising we didn’t see a larger move but this may be due to anticipated government purchasing. Commodities were mixed with WTI crude oil surging 3.3% to $53bbl, while gold fell 1.5% to $938oz. Our long-term view remains bullish on gold, but we are conscious of the diminishing luster of this product if stocks are able to continue its recent course. Gold as an inflationary hedge may not have as much upward, versus gold as an instrument to hedge risk. The technical story should help us navigate through the uncertainty in the mean time, oscillators like RSI are strong indicators in gauging short-term moves.
The long awaited plan for the US government to step in and purchase the so-called “toxic assets” from bank balance sheets has finally arrived. This is a critical component to the overall recovery process, which will likely take an additional 6-12 months as home prices remain somewhat elevated and economic growth stagnated. Further support from a monetary policy perspective should act as another catalyst to the rally euphoria sweeping through the marketplace. A weaker dollar should result from the recent market events opening the door to stronger corporate earnings through cheaper export cost. We are still waiting for a response from the ECB regarding other central banks unorthodox policy. Yesterday's comments from Trichet and Weber provided little clarity (perhaps even lowering the probability) on whether the ECB will follow the Fed in expanding its balance sheet.
Data released today will be UK Consumer prices, EuroZone PMI surveys and US House prices. The UK RPI figures are expected to fall to deflationary levels. EZ PMI data is likely to corroborate that the regional economy continued to contract in Q1. In the US after a bounce in December, we expect prices to continue their downward trend.
| Global Indexes | Current Level | % Change |
| Nikkei 225 Index | 8,488.30 | + 3.32 |
| Hang Seng Index | 13,819.43 | + 2.76 |
| Shanghai Index | 2,338.42 | + 0.55 |
| FTSE futures | 3,917.50 | + 3.50 |
| DAX futures | 4,245.50 | + 1.33 |
| SMI Futures | 4,954.00 | + 1.57 |
| DJIA futures | 7,706.00 | - 0.07 |
| World Markets | Current Level | % Change |
| Gold | 937.46 | - 0.21 |
| Silver | 13.64 | - 0.47 |
| VIX | 43.23 | - 5.72 |
| Crude wti | 53.60 | - 0.37 |
| USD Index | 83.54 | + 0.19 |
| Todays Calender | Estimates | Previous | Country / GMT |
| PPI, % m/m | -- | 0.9,3.9y | SW / 8.30 |
| Flash" manufacturing PMI, index Mar | 33.6 | 33.5 | EZ / 8.58 |
| Flash" services PMI, index Mar | 39.2 | 39.2 | EZ / 8.58 |
| Flash" composite PMI, index Mar | 36.2 | 36.2 | EZ / 8.58 |
| Current account,EUR bn (sa) Jan | -- | -7.3 | EZ / 8.58 |
| CPI, % m/m Feb | 0.2,2.5Y | -0.7,3.0Y | UK / 9:30 |
| Core CPI, % m/m Feb | 1.3Y | -0.9,1.3Y | UK / 9:30 |
| RPI, % m/m Feb | -0.2,-0.8Y | -1.3,0.1Y | UK / 9:30 |
| RPIX, % m/m Feb | 1.8 y/y | -0.8 ,2.4Y | UK / 9:30 |
| BBA mortgage approvals, K Feb | -- | 23.4 | UK / 9:30 |
| Industrial orders, % m/m Jan | -6.0 | -5.8,-25.0 | EZ / 10:00 |
| FHFA house prices , % m/m (y/y) Jan | -- | 0.1 (-8.7) | US / 14:00 |
| Trade balance, bn JPY Feb | -20.0 | -956.9 | JP / 23:50 |
Currency Tech
AUDUSD
R 3: 0.7355
R 2: 0.7268
R 1: 0.7142
CURRENT: 0.7049
S 1: 0.6852
S 2: 0.6724
S 3: 0.6567
EURJPY
R 3: 138.57
R 2: 136.39
R 1: 134.21
CURRENT: 134.02
S 1: 130.00
S 2: 129.02
S 3: 127.95
USDSGD
R 3: 1.5441
R 2: 1.5361
R 1: 1.5212
CURRENT: 1.5074
S 1: 1.5036
S 2: 1.4904
S 3: 1.4805
- S: Strong, M: Minor, T: Trendline, K: Keylevel, P: Pivot
