Market Brief
The sharp drop in risk appetite has been attributed to the World Bank’s cut in its growth forecast. Yesterday the World Bank downgraded revisions to global growth predicting a contraction of 2.9% was significantly below the 1.7% forecasted in March. In addition the World Bank warned that it envisioned a deeper global economic recession this year and called for 'bold' policies and further coordination. However, we have little faith that international organization economic forecasts would have such a potentate effect on the markets (also news of revisions were reported last week), we have more faith in speculation surrounding China's commodity purchase slow down and loss of faith in the USs aggressive fiscal & monetary policies. Commodity currencies were the biggest losers, with the AUDUSD falling to 0.7800 from Friday's 0.8120 highs, while the USDCAD closed above the psychological the 1.1500 level. The correlation between oil and EURUSD is still running high and trading below $68.00bll will keep pressure on the EURUSD. In the mid term, we expect commodity prices to stabilize as the outlook for global growth improves and remains constructive on commodity currencies.
Today, the most important economic releases will be the Eurozone's "flash" PMIs for both manufacturing and service. After that, all eyes will be on Wednesday's FOMC meeting and the next wave of Treasury auctions
| Global Indexes | Current Level | % Change |
| Nikkei 225 Index | 9,549.61 | - 2.81 |
| Hang Seng Index | 17,595.64 | - 2.56 |
| Shanghai Index | 2,892.70 | - 0.12 |
| FTSE 100 Index | 4,244.32 | + 0.24 |
| DAX Index | 4,709.46 | + 0.34 |
| SMI Index | 5,298.63 | - 0.22 |
| DJIA futures | 8,318.00 | + 0.42 |
| World Markets | Current Level | % Change |
| Gold | 920.53 | - 0.23 |
| Silver | 13.79 | + 0.36 |
| VIX | 31.17 | + 11.36 |
| Crude wti | 67.28 | - 0.32 |
| USD Index | 80.69 | - 0.19 |
| Todays Calender | Estimates | Previous | Country / GMT |
| FOMC meeting starts (to 24 June) | -- | -- | USD / -- |
| NBP interest rate announcement, % 25-Jun | 3.50 | 3.75 | PLN / -- |
| Germany "Flash" manufacturing PMI, index Jun | 41.0 | 39.6 | EUR / 07.28 |
| E16: "Flash" manufacturing PMI, index Jun | 42.3 | 40.7 | EUR / 07.58 |
| E16: "Flash" services PMI, index Jun | 45.8 | 44.8 | EUR / 07.58 |
| E16: "Flash" composite PMI, index Jun | 45.9 | 44.0 | EUR / 07.58 |
| BBA mortgage approvals, K May | -- | 27.7 | GBP / 08.30 |
| headline CPI, % y/y May | 7.8 | 8.4 | ZAR / 09.30 |
| ECB's Ordonez testifies before a parliamentary com | -- | -- | EUR / 10.00 |
| ECB's Weber speaks on "The financial crisis - Reac | -- | --- | EUR / 13.00 |
| FHFA purchase-only house prices , % m/m (y/y) Apr | -0.3,-6.9 | -1.1,-7.3 | USD / 14.00 |
| Existing home sales, mn saar May | 4.82 | 4.68 | USD / 14.00 |
| Trade balance, $ mn May-P | -- | 210 | MXN / 19.30 |
| Corporate service price index, % y/y May | -2.8 | -2.4 | JPY / 23.50 |
Currency Tech
AUDUSD
R 3: 0.8378
R 2: 0.8265
R 1: 0.8120
CURRENT: 0.7850
S 1: 0.7745
S 2: 0.7700
S 3: 0.7630
EURJPY
R 3: 138.30
R 2: 135.37
R 1: 134.20
CURRENT: 132.42
S 1: 131.50
S 2: 129.70
S 3: 126.95
USDSGD
R 3: 1.4800
R 2: 1.4748
R 1: 1.4666
CURRENT: 1.4584
S 1: 1.4515
S 2: 1.4425
S 3: 1.4385
- S: Strong, M: Minor, T: Trendline, K: Keylevel, P: Pivot
