Market Brief
The Usd was stronger in the Asian session, as risk appetite waned on the back of weaker than expected economic data. The EurUsd traded between 1.3600 and 1.3530, while the UsdJpy traded from 95.30 to 95.77. The Sterling was weaker as the dovish inflation report opened the door for further BoE QE trading down to 1.5100 against the Usd. Softer data from China (industrial profits) , EU ( industrial production) and the US (retail sales) spoiled the party for risk takers. Wall Street closed lower and Asian and European equity markets are following the US lead. The primary shift in risk sentiment was assigned to the US retail sales, which contracted by 0.4% vs. 0.0% exp. Investors pulled out of equities will 30yr Trsy yields falling to 4.10%. The financial sector was the hardest hit, as fickle traders didn’t take kindly to Treasury Secretary Geithner comments that the financial system was improving and worries over systemic risk had shrunk. And on a side note, the Obama administration moved to gain more control over the opaque o-t-c derivatives market, now closely linked to the global credit crisis.
In London, BoJ Governor Shirakawa's commented that excessive volatility in the FX markets is not desirable. This comment comes as the Jpy buying has picked up momentum and now is heading to the 95.15 levels against the Usd. In addition, the Jpy has picked up further strength as traders liquidate Aud and Nzd positions. Meanwhile, a crack within the ECB consensus has emerged over the central bank's strategy to buy covered bonds. Weber said covered bond purchases would be held at EUR60bn, while Council Member Kranjec said ECB purchases are "likely" to exceed that level. Today's light economic calendar will have FX market driven by risk appetite and corresponding trading in global Equity markets.
| Global Indexes | Current Level | % Change |
| Nikkei 225 Index | 9,093.73 | -2.64 |
| Hang Seng Index | 16,495.02 | -3.31 |
| Shanghai Index | 2,639.89 | -0.89 |
| FTSE 100 Index | 4,314.92 | -0.38 |
| DAX Index | 4,687.88 | -0.84 |
| SMI Index | 5,261.66 | -0.29 |
| DJIA futures | 8,276.00 | -0.21 |
| World Markets | Current Level | % Change |
| Gold | 924.58 | -0.18 |
| Silver | 13.79 | -1.32 |
| VIX | 33.65 | 5.81 |
| Crude wti | 57.51 | -0.87 |
| USD Index | 82.62 | 0.14 |
| Todays Calender | Estimates | Previous | Country / GMT |
| Initial Jobless Claims (May 9th) | 610K | 601 | USD / 12.30 |
| Producer Prices (Apr) | 0.2%,-3.7 | -1.2%,-3.6 | USD / 12.30 |
| Core Producer Prices (Apr) | 0.1%,3.4 | 0.0%,3.8 | USD / 12.30 |
| ECB Executive Board member Gonalez speaks | -- | -- | EUR / 15.30 |
| CBT Interest Rate Announcment | 9.25% | 9.75% | TRY / 16.00 |
| ECB Executive Board member Stark speaks | -- | -- | EUR / 16.20 |
| Retail Sales | -- | 0.2 | NZD / 22.45 |
Currency Tech
AUDUSD
R 3: 0.8520
R 2: 0.8098
R 1: 0.7738
CURRENT: 0.7514
S 1: 0.7460
S 2: 0.7337
S 3: 0.7233
EURJPY
R 3: 134.80
R 2: 133.60
R 1: 132.40
CURRENT: 129.80
S 1: 126.63
S 2: 124.40
S 3: 122.15
USDSGD
R 3: 1.4882
R 2: 1.4800
R 1: 1.4745
CURRENT: 1.4672
S 1: 1.4500
S 2: 1.4445
S 3: 1.4271
- S: Strong, M: Minor, T: Trendline, K: Keylevel, P: Pivot
