Market Brief
Risk appetite seem to be on the retreat with European equity markets renting lower and US equity futures now pointing to a lower open. While the earning season has yet to provide any real surprise we still have plenty of crucial reports in the week to come. We expect the uncertainly to undermine optimism and support USD and JPY buying. Markets will be content to stick within in the ranges before the US session opens and Bernanke’s testifies in front of congress. In order to avoid unsettling the market the Chairman released an article on the WSJ online this morning. Bernanke’s states that the Fed is unlikely to tighten policy saying '…economic conditions are not likely to warrant tighter monetary policy for an extended period.' However he does go into some details on potential exit strategies from QE. EURUSD is trading between 1.4180 - 1.4240 while USDJPY has found support off the 93.75 lvls and is now retracing to 94.30 intra day highs. The BoC announces interest rates today and the markets look for no change in the overnight rate at 0.25%. However, the focus will be on the CB view on the current CAD appreciation. At Junes meeting the statement read "If the unprecedentedly rapid rise in the Canadian dollar proves persistent, it could fully offset these (domestic economic data) positive factors". Clearly the bank is concerned about CAD pricing and crushing Canadas fragile recovery. We expect the central bank to strengthen the CAD language from the previous statement but stay clear of signaling actual intervention.
| Global Indexes | Current Level | % Change |
| Hang Seng Index | 19,415.37 | -0.44 |
| Shanghai Index | 3,213.21 | -1.64 |
| FTSE 100 Index | 4,456.91 | 0.29 |
| DAX Index | 5,051.12 | 0.41 |
| SMI Index | 5,634.85 | 0.12 |
| DJIA futures | 8,790.00 | -0.17 |
| S&P future | 947.7 | -0.13 |
| World Markets | Current Level | % Change |
| Gold | 948.84 | 0.01 |
| Silver | 13.63 | -0.22 |
| VIX | 24.4 | 0.24 |
| Crude wti | 63.99 | 0.01 |
| USD Index | 78.99 | 0.2 |
| Todays Calender | Estimates | Previous | Country / GMT |
| PSNB, £ bn Jun | 15.5 | 19.9 | GBP / 08.30 |
| PSNCR, £ bn Jun | -- | 18.8 | GBP / 08.30 |
| BoC interest rate announcement, % | 0.25 | 0.25 | CAD / 13.00 |
| Fed Chairman Bernanke delivers semi-annual Monetar | -- | -- | USD / 14.00 |
Currency Tech
AUDUSD
R 2: 0.8260
R 1: 0.8235
CURRENT: 0.8126
S 1: 0.7925
S 2: 0.7815
EURJPY
R 2: 136.90
R 1: 134.80
CURRENT: 133.49
S 1: 131.60
S 2: 129.35
USDCAD
R 2: 1.1350
R 1: 1.1225
CURRENT: 1.1082
S 1: 1.0930
S 2: 1.0785
- S: Strong, M: Minor, T: Trendline, K: Keylevel, P: Pivot
