Market Brief
The Usd was slightly stronger in the Asian session, as traders bought back dollars to lock in short term profits. The EurUsd traded down to 1.3357 from 1.3438 (re-establishes uptrend and exposes 1.3582), while the UsdJpy continued to slide from 99.00 to 98.62. Risk appetite continues to improve with the S&P rising by 3.4% yesterday, despite the expected stress test results today. Asian regional indexes are following their lead. Data released yesterday suggests the global economy is bottoming and traders are now searching for risk. China ’s PMI rose to 50.1 from 44.8 in April, while US construction spending and pending home sales rose 0.3% and 3.2% respectively. The market especially liked the US figures, which goes directly at the root of the financial crisis. Risk correlated assets saw significant gains including EM and Carry trades, as Usd traded from 13.7690 down to 13.300 against the Mxn. As expected, the RBA decided to leave the cash rate unchanged at 3.0%. While the RBA again emphasized downside risks, they also increased weight on the concept of recovery in the tail-end of 09. The RBA stated "The stance of monetary policy, together with the substantial fiscal initiatives, will provide significant support to domestic demand over the period ahead," which hints to the banks reluctance to further cuts (market is now pricing in 2.40%). The AudUsd was able to break the 0.7400 resistance on the back of firming commodity prices and mildly optimistic accompanying statement. And on a side note Australian Residential building approvals increased by 3.5% in February, stronger than expected by the market. As we stated yesterday, while the rally in risk assets is showing no sign of abating, critical events ahead (Bank Stress Test and ECB rate decision) will test the markets conviction.
| Global Indexes | Current Level | % Change |
| Nikkei 225 Index | 8,977.37 | + 1.68 |
| Hang Seng Index | 16,401.45 | + 0.12 |
| Shanghai Index | 2,567.34 | + 0.29 |
| FTSE 100 Index | 4,330.37 | + 2.05 |
| DAX Index | 4,877.58 | - 0.53 |
| SMI Index | 5,297.74 | - 0.38 |
| DJIA futures | 8,326.00 | - 0.39 |
| World Markets | Current Level | % Change |
| Gold | 902.93 | + 0.09 |
| Silver | 13.06 | + 0.11 |
| VIX | 34.53 | - 2.18 |
| Crude wti | 53.80 | - 1.23 |
| USD Index | 84.06 | + 0.10 |
| Todays Calender | Estimates | Previous | Country / GMT |
| Construction PMI, index Apr | 31.7 | 30.9 | GBP / 8.28 |
| PPI, % m/m (y/y) Mar | -0.5,-2.9 | -0.5,-1.7 | EUR / 9.00 |
| ISM non-mfg composite, index Apr | 42.0 | 40.8 | USD / 14.00 |
| Fed Chairman Bernanke testifies before the Joint E | -- | -- | USD / 14.00 |
| FRB of Minneapolis President Stern (FOMC non-voter | -- | -- | USD / 17.15 |
| Nationwide consumer confidence, index Apr | -- | 41 | GBP / 23.01 |
Currency Tech
AUDUSD
R 3: 0.7820
R 2: 0.7740
R 1: 0.7560
CURRENT: 0.7392
S 1: 0.7233
S 2: 0.7050
S 3: 0.6954
EURJPY
R 3: 137.40
R 2: 135.57
R 1: 134.33
CURRENT: 132.21
S 1: 130.30
S 2: 128.90
S 3: 126.63
USDSGD
R 3: 1.5090
R 2: 1.4980
R 1: 1.4880
CURRENT: 1.4737
S 1: 1.4675
S 2: 1.4500
S 3: 1.4445
- S: Strong, M: Minor, T: Trendline, K: Keylevel, P: Pivot
