Market Brief
The Usd and Jpy were stronger in the Asian session as equity market continued to sell off. The EurUsd traded down to 1.2897 from 1.2957, while the UsdJpy traded down to 97.67 (below 21d MA) from 98.46. Asian regional indexes closed lower with the Hang Seng down -3.04% and European markets are all trading in the red with the DAX down -4.27%.. However, currently US index futures are pointing to a higher open. The focus has moved away from corporate earnings and now participants are debating possible outcomes to the US government’s stress tests (potentially May 4th release). Concern over US ‘stress tests’ has triggered a risk-reduction across the board just as signs of growth stabilization are spreading, and the consensus for growth is forming a bottom. Sentiment was also hurt after a major Bank of America reported strong profits but warned of worsening conditions in the near future and the need to increase provisions for credit losses. FX market reaction to the latest outburst of risk aversion has been defined by Usd and Jpy strength, with limited Chf appreciation.. Regarding the Chf, SNB's Roth repeated last week that the central bank would continue to sell the Chf for as long as necessary to prevent its appreciation to combat deflation. We interpret these remarks as defending the EurChf 1.500 level. In short, if the SNB is that vocal about defending the Chf we will be looking for opportunities to sell into strength. We are also looking to sell riskier currencies such as EM, Aud, Nzd and Cad.
Today the Riksbank is expected to cut its repo rate by 50bps to 0.50% and in addition could announce the implementation of some unconventional measures such as purchases of debt. The German ZEW sentiment survey market is looking for the index to head back into positive territory however as an indicator of GDP growth the survey has not been very accurate. And finally the Bank of Canada is expected to hold rates at .50% and announce the implementation of some type of QE program.
| Global Indexes | Current Level | % Change |
| Nikkei 225 Index | 8,711.33 | -2.39 |
| Hang Seng Index | 15,243.20 | -3.22 |
| Shanghai Index | 2,535.83 | -0.84 |
| FTSE 100 Index | 4,001.30 | 0.26 |
| DAX Index | 4,521.57 | 0.78 |
| SMI Index | 5,062.04 | -0.06 |
| DJIA futures | 7,847.00 | 0.34 |
| World Markets | Current Level | % Change |
| Gold | 888.4 | 0.44 |
| Silver | 12.18 | 0.74 |
| VIX | 39.18 | 15.43 |
| Crude wti | 45.6 | -0.61 |
| USD Index | 86.58 | -0.07 |
| Todays Calender | Estimates | Previous | Country / GMT |
| CPI, % m/m (y/y) Mar | 0.2 (2.9) | 0.9 (3.2) | GBP / 8.30 |
| Core CPI, % m/m (y/y) Mar | (1.5 y/y) | 0.7 (1.6) | GBP / 8.30 |
| BoE executive director of markets Paul Fisher atte | -- | -- | GBP / 8.45 |
| ZEW economic expectations index Apr | 1 | -3.5 | EUR / 9.00 |
| BoE MPC member Andrew Sentence speaks at the Agric | -- | -- | GBP / 9.30 |
| BoC interest rate announcement, % | 0.50% | 1.00% | CAD / 13.00 |
| ECB Vice-President Papademos presents the Annual R | -- | -- | EUR / 17.30 |
Currency Tech
AUDUSD
R 3: 0.7355
R 2: 0.7327
R 1: 0.7250
CURRENT: 0.7022
S 1: 0.6857
S 2: 0.6770
S 3: 0.6725
EURJPY
R 3: 132.00
R 2: 131.45
R 1: 129.70
CURRENT: 126.80
S 1: 125.45
S 2: 122.13
S 3: 121.75
USDSGD
R 3: 1.5363
R 2: 1.5258
R 1: 1.5189
CURRENT: 1.5072
S 1: 1.4952
S 2: 1.4905
S 3: 1.4805
- S: Strong, M: Minor, T: Trendline, K: Keylevel, P: Pivot
