Market Brief
The Usd was stable in the Asian session, as a lack of market moving data has kept traders sidelined. The EurUsd traded down to 1.3929 from 1.4000, while the UsdJpy bounced around the 94.70 level. With another slow economic day scheduled today and debate surrounding credit ratings and foreign demand, markets will be watching this US auctions (US$40bln 2y note) cautiously. Latest auctions suggest that demand for US paper remains strong, with recent $40bn 2 yrs covered 2.75 times. The primary risk to these currencies is whether sovereign bidders finally lost appetite and shift their focus. As such, a soft indirect bidder participation rate at near term auctions may also damage the Usd. However, we don’t believe it in the interests of reserve holders (ie China ) to act wildly given the economic environment. Asian regional indexes are trading lower as threats from N. Korea regarding additional missile tests have weighed on risk appetite. The KRW has come under selling pressure after appreciating over 20% against the Usd (equity markets are up 40% on the year), as the recent hawkish actions by its northern neighbor , has pressured traders to take profits. In Japan, the BoJ's and government's upgrades of the country's economic assessment is a positive development. However, the BoJ did warn that unemployment would stay elevated for an extended period, which could hurt any economic recovery. Overall, we believe the recent Usd selling looks heavily speculative and expect a correction near term.
| Global Indexes | Current Level | % Change |
| Nikkei 225 Index | 9,310.81 | -0.38 |
| Hang Seng Index | 16,991.56 | -0.76 |
| Shanghai Index | 2,588.58 | -0.87 |
| FTSE 100 Index | 4,338.37 | -0.67 |
| DAX Index | 4,855.28 | -1.26 |
| SMI Futures | 5,406.14 | -0.73 |
| DJIA futures | 8,248.00 | -0.14 |
| World Markets | Current Level | % Change |
| Gold | 950.25 | -0.89 |
| Silver | 14.51 | -1.6 |
| VIX | 32.63 | 4.08 |
| Crude wti | 60.32 | -2.18 |
| USD Index | 80.53 | 0.63 |
| Todays Calender | Estimates | Previous | Country / GMT |
| Unemployment rate, % Apr | 8.3 | 8.3 | SEK / 7.30 |
| Current account, ¤ bn (sa) Mar | -- | -8.1 | EUR / 8.00 |
| Industrial orders, % m/m (y/y) Mar | 1.0,-28.9 | -0.1,-32.1 | EUR / 9.00 |
| GDP, % q/q saar Q1 | -3.5 | -1.8 | ZAR / 9.30 |
| S&P/Case-Shiller 20-city house price index, % y/y | -18.4 | -18.63 | USD / 13.00 |
| Consumer confidence, index May | 42 | 39.2 | USD / 14.00 |
| Trade surplus, JPY bn Apr | -63 | 10.3 | JPY / 23.50 |
| BoJ minutes published | -- | -- | JPY / 23.50 |
Currency Tech
AUDUSD
R 3: 0.8095
R 2: 0.7930
R 1: 0.7870
CURRENT: 0.7764
S 1: 0.7630
S 2: 0.7450
S 3: 0.7337
EURJPY
R 3: 135.55
R 2: 134.80
R 1: 133.60
CURRENT: 131.91
S 1: 130.73
S 2: 129.75
S 3: 126.60
USDSGD
R 3: 1.4748
R 2: 1.4665
R 1: 1.4555
CURRENT: 1.4513
S 1: 1.4320
S 2: 1.4270
S 3: 1.4167
- S: Strong, M: Minor, T: Trendline, K: Keylevel, P: Pivot
