Market Brief
The Usd was weaker in the Asian session, as the final US Treasury auction concluded without incident sparking risk appetite. The EurUsd traded up to 1.4022 from 1.3907, while the UsdJpy traded between 98.90 and 96.26. The GbpUsd regained its bullish momentum trading back above 1.6050. The final auction of $26bn 7yr notes ended the week where $101bn of new supply hit the streets. The auction was inline with expectations, with indirect bidder’s percentage and bid-cover ratios similar to past results. The uneventful auction combined with higher demand for US durable good (at 1.9%) was celebrated by traders. Equity markets in Asia are largely in positive territory, following Wall Street's strong finish yesterday. With US Treasury yields rising (10yr above 3.50%) and with the greenback continually under pressure, there is a sense that global investors want a higher risk premium to hold USD denominated assets. It's important to mention that the rising yield at the long end is now pushing mortgage rates higher and threatening to trample on US' fragile “green shots”. In other news, the media is reporting that GM is planning to file for bankruptcy on June 1st (widely expected). Overall traders are now clearly focused on credit markets, which are showing renewed signs of strains and FX traders should be ready for a sudden and rapid bout of deleveraging if tensions persist.
In Japan, Key CPI and industrial production data both surprised to the upside. The National headline CPI fell by only 0.1%y/y, a figure that might help ease deflation fears . However, the BoJ is well aware that the country is not in the clear just yet . Industrial production managed a 5.2%m/m expansion, pushing the y/y figure to -31.2%y/y, slightly better than expectations. The unemployment rate, however, increased to 5 .0 % from 4.8% previously, the highest level in over 5 1/2 years. And as the government has expressed along side recent economic upgrades, without a recovery in the labor markets the downside risk to the economic is still a reality.
Today, US preliminary Q1 GDP, Chicago PMI and the University of Michigan confidence index come out and as the markets are watching for more proof of green shots, these will be critical.
| Global Indexes | Current Level | % Change |
| Nikkei 225 Index | 9,522.50 | 0.75 |
| Hang Seng Index | 18,171.00 | 1.58 |
| Shanghai Index | 2,632.93 | 1.71 |
| FTSE 100 Index | 4,439.18 | 1.17 |
| DAX Index | 4,988.57 | 1.12 |
| SMI Index | 5,383.45 | 0.61 |
| DJIA futures | 8,404.00 | 0.23 |
| World Markets | Current Level | % Change |
| Gold | 973.05 | 1.41 |
| Silver | 15.46 | 2.04 |
| VIX | 31.67 | -2.13 |
| Crude wti | 65.54 | 0.7 |
| USD Index | 80.07 | -0.55 |
| Todays Calender | Estimates | Previous | Country / GMT |
| Flash HICP, % y/y May | 0.2 | 0.6 | EUR / 09.00 |
| Unemployment rate, % Apr | 9.1 | 8.9 | EUR / 09.00 |
| ECB President Trichet speaks on “The role of centr | -- | -- | EUR / 09.15 |
| KoF leading indicator May | -1.8 | -1.86 | CHF / 09.30 |
| Current account (BOP), C$ bn 1Q | -10.5 | -7.5 | CAD / 12.30 |
| GDP, % q/q saar Q1-P | -5.5,-2.5 | -6.1,-2.6A | USD / 12.30 |
| GDP price index, % q/q saar Q1-P | 2.9 (2.1) | 2.9 (2.1) | USD / 12.30 |
| Chicago PMI, index May | 42 | 40.1 | USD / 13.45 |
| Michigan consumer sentiment May-F | 68 | 67.9 P | USD / 13.55 |
Currency Tech
AUDUSD
R 3: 0.8152
R 2: 0.8097
R 1: 0.7929
CURRENT: 0.7926
S 1: 0.7703
S 2: 0.7630
S 3: 0.7451
EURJPY
R 3: 138.57
R 2: 137.40
R 1: 135.57
CURRENT: 135.03
S 1: 131.50
S 2: 130.73
S 3: 129.75
USDSGD
R 3: 1.4748
R 2: 1.4665
R 1: 1.4583
CURRENT: 1.4470
S 1: 1.4320
S 2: 1.4270
S 3: 1.4167
- S: Strong, M: Minor, T: Trendline, K: Keylevel, P: Pivot
