Market Brief
Japan’s $154Bn stimulus package announced late last week met expectations. The stimulus package would contribute to 1.5 – 2.0 percentage points to economic growth for fiscal 2009 and while this would usually be positive for a currency, observers are weary Japan’s government debt share as a share of GDP nears 200%. The bleak economic outlook for the world’s second largest economy has analysts worried the Nippon economy will have a hard time fighting the deflationary risks inherent with low interest rates and dwindling domestic demand. Wholesale prices in Japan dropped significantly in recent months as domestic demand wanes – the BoJ will have to look at unconventional means of boosting the economy.
On another note, Chinese Premier Wen Jiabao told reporters at the East Asian summit in Thailand that “China’s economy has shown some positive signs, but we can all see that our economy still faces some very big difficulties”. Many feel that the improving domestic demand in China will lead Asia out of the economic crisis – Auto sales and the housing sector showing encouraging signs of a bottom.
While markets trade lightly on this Easter Monday Earning’s season continues with illustrious Financials such as Citi, Goldman Sachs and JPMorgan & Chase to announce their better than expected first quarter results this week we should see a return of risk appetite, with USDJPY and EURUSD as bulls. Another interesting dynamic to note is the return of the Yen carry trade. With U.S rates so low, the NZDJPY and AUDJPY are set to see healthy inclines as investors borrow the low yielding Yen against the high interest-rate Aussie and Kiwi.
Commodities remain weak and trade sideways as Gold has found a level just under $890/oz and crude trades around the $52/bbl mark.
| Global Indexes | Current Level | % Change |
| Nikkei 225 Index | 8924.43 | - 0.44 |
| Hang Seng Index | 13901.41 | + 2.95 |
| Shanghai Index | 2511.05 | + 2.73 |
| FTSE futures | 3929.5 | + 1.47 |
| DAX futures | 4492.5 | + 2.89 |
| DJIA futures | 7966 | - 0.64 |
| Nasdaq futures | 1329 | - 0.52 |
| World Markets | Current Level | % Change |
| Gold | 887.56 | + 0.67 |
| Silver | 12.52 | + 1.21 |
| VIX | 36.53 | - 5.97 |
| Crude wti | 51.45 | - 1.51 |
| USD Index | 85.48 | - 0.35 |
| Todays Calender | Estimates | Previous | Country / GMT |
| Business Outlook Future sales | - | - | CAD / 14:30 |
| Retail Sales | -0.5% | -1.1% | NZD / 22:45 |
Currency Tech
AUDUSD
R 3: 0.7278
R 2: 0.7268
R 1: 0.7250
CURRENT: 0.7241
S 1: 0.7221
S 2: 0.7174
S 3: 0.7054
EURJPY
R 3: 137.55
R 2: 134.51
R 1: 133.57
CURRENT: 133.04
S 1: 131.63
S 2: 131.00
S 3: 129.87
USDSGD
R 3: 1.5361
R 2: 1.5258
R 1: 1.5219
CURRENT: 1.5145
S 1: 1.5113
S 2: 1.4973
S 3: 1.4904
- S: Strong, M: Minor, T: Trendline, K: Keylevel, P: Pivot
