Market Brief
We are seeing a slight pull back in risk correlated trades, after the initial euphoria over China State Construction Engineering Corp moving closer to its much anticipated IPO and equity indexes have made new yearly highs, has worn off. While Asian regional indexes were broadly higher (Shanghai’s up 2.59%), European stock markets have failed to follow and US futures are pointing to a lower open. Right now, the momentum in the EURUSD seems to be waning, as the correction from Tuesday’s 1.4280 highs continues. We haven’t witnessed any real earning surprises to the downside as expected, while Caterpillar tripled earning expectations, which have supported risk appetite. The much hyped Fed Chairman Bernanke's testimony didn’t surprise the markets, as he stayed well within the pre-released WSJ article script. Overall, he provided details of the Fed's exit strategy from QE, focused on the fact that unemployment could undermine the US fragile recovery and that the current stimulus measures would stay in place for some time. In Canada, the BoC held rates steady at 0.25% while strengthening the language regarding the recent CAD appreciation. Market reacted by pushing USDCAD off the 1.0965 support to 1.1110. And finally Australian CPI came in lower than expected. However, this has not dampened expectations that the next RBA move will be higher. We expect rate expectations, the global and domestic recovery to support the AUD mid term (risk appetite will be the core determinate near term).
| Global Indexes | Current Level | % Change |
| Nikkei 225 Index | 9,723.16 | 0.73 |
| Hang Seng Index | 19,248.17 | -1.3 |
| Shanghai Index | 3,296.62 | 2.59 |
| FTSE 100 Index | 4,473.28 | -0.17 |
| DAX Index | 5,081.70 | -0.24 |
| SMI Index | 5,621.88 | -0.25 |
| DJIA futures | 8,824.00 | -0.69 |
| World Markets | Current Level | % Change |
| Gold | 947.1 | -0.14 |
| Silver | 13.47 | -0.55 |
| VIX | 23.87 | -2.17 |
| Crude wti | 64.83 | -1.18 |
| USD Index | 79 | 0.21 |
| Todays Calender | Estimates | Previous | Country / GMT |
| BoE MPC minutes, vote | Sep-00 | Sep-00 | GBP / 08.30 |
| Industrial orders, % m/m May | 1.8 | -0.8,-31.9 | EUR / 09.00 |
| CBI industrial trends, total orders, net bal Jul | -45 | -51 | GBP / 10.00 |
| CBI quarterly trends, business optimism, net bal Q | -- | -40 | GBP / 10.00 |
| Retail sales less autos, % m/m May | -- | -0.5 | CAD / 12.30 |
| FHFA house price index, % m/m (y/y) May | -0.2, -6.6 | -0.1, -6.8 | USD / 14.00 |
| Fed Chairman Bernanke delivers semi-annual Monetar | -- | -- | USD / 14.00 |
| Trade balance, bn JPY Jun | 610 | 298 | JPY / 23.50 |
Currency Tech
AUDUSD
R 2: 0.8260
R 1: 0.8235
CURRENT: 0.8133
S 1: 0.7925
S 2: 0.7815
EURJPY
R 2: 136.90
R 1: 134.80
CURRENT: 132.45
S 1: 132.28
S 2: 131.60
USDCAD
R 2: 1.1350
R 1: 1.1225
CURRENT: 1.1079
S 1: 1.0930
S 2: 1.0785
- S: Strong, M: Minor, T: Trendline, K: Keylevel, P: Pivot
