Market Brief
The Usd was weaker in the Asian session as stronger than expected Chinese PMI helped risk appetite. The EurUsd traded higher to 1.3347 from 1.3260, while the UsdJpy was range bound between 99.20 – 99.50. Our currency risk indicator, AudJpy, continued to push higher to 73.55 from 72.60. The MXN improved as Mexican officials stated that the swine flu outbreak had peaked, trading down to 13.70 against the Usd. Asian equity markets have closed higher (Japan is closed for most of the week) and Europe is currently trading in positive territory. According to Reuters, the World Health Organization’s emergency committee has no meeting currently scheduled to review the global pandemic level. And a key Chinese government think-tank said Chinese annual economic growth will rise to 7 percent in the second quarter, up from the first quarter's 6.1 percent. Both reports have enabled risk correlated assets to improve.
This week, the US bank stress test results are expected to be announced on May 7. The government provided some details on the methodologies behind the tests and results but by bumping the results has made investors anxious. Officials claim that there are banks debating the results and concerns about how to make public the results with minimal market disruption.
The market will also be focused on the ECB meeting Thursday. The central bank is widely expected to cut rates by 25bp to 1%, but it is the package of unconventional measures that the market is truly focused on. As of yet, there is still no consensus on the size or scope of the package, and comments from ECB members have illustrated division. We still believe the ECB will move in the direction of unconventional easing and expect Eur selling on the announcement.
Non-farm payrolls highlight the data releases this week. We are looking for NFP to trough in the months to come. Last week's Initial jobless claims, fell to 631k from a revised 645k the previous week. Any sort of continual decline could be indicative of a turning point in the labor market and positive for risk appetite (negative for the Usd).
| Global Indexes | Current Level | % Change |
| Hang Seng Index | 16,381.05 | + 5.54 |
| Shanghai Index | 2,559.91 | + 3.32 |
| FTSE 100 Index | 4,243.41 | - 0.01 |
| CAC 40 Index | 3,183.95 | + 0.76 |
| DAX Index | 4,840.86 | + 1.49 |
| SMI Index | 5,253.03 | + 0.51 |
| DJIA futures | 8,237.00 | + 0.68 |
| World Markets | Current Level | % Change |
| Gold | 894.55 | + 0.90 |
| Silver | 12.66 | + 1.11 |
| VIX | 35.30 | - 3.28 |
| Crude wti | 53.46 | + 0.48 |
| USD Index | 84.35 | - 0.22 |
| Todays Calender | Estimates | Previous | Country / GMT |
| German Final Manufacturing PMI, index Apr | 35.0 | 35.0 P | EUR / 7.58 |
| Final Manufacturing PMI, index Apr | 36.7 | 36.7 P | EUR / 7.58 |
| Construction spending, % m/m (y/y) Mar | -1.4,-12.5 | -0.9,-10.0 | USD / 14.00 |
| Pending home sales, %m/m (y/y) Mar | 0.0 (-1.9) | 2.1 (-1.4) | USD / 14.00 |
Currency Tech
AUDUSD
R 3: 0.7944
R 2: 0.7817
R 1: 0.7738
CURRENT: 0.7355
S 1: 0.7233
S 2: 0.7049
S 3: 0.6954
EURJPY
R 3: 137.40
R 2: 135.57
R 1: 134.35
CURRENT: 132.27
S 1: 130.30
S 2: 128.90
S 3: 126.63
USDSGD
R 3: 1.5090
R 2: 1.4979
R 1: 1.4880
CURRENT: 1.4774
S 1: 1.4705
S 2: 1.4675
S 3. 1.4500
- S: Strong, M: Minor, T: Trendline, K: Keylevel, P: Pivot
