Market Brief
Risk appetite hit a rough patch today, as weak US consumer confidence data then reports that two of China's largest state-owned commercial banks have put a cap on lending targets, eroded market optimism. Risky Assets came under selling pressure and short USD positions were moderately covered. Both the Hang Seng and Shanghai indexes have come under significant selling pressure. However, European indexes have moved into the positive, hinting that what we have seen was only a short term correction. In European session, markets and the BoE will be watching mortgage approvals and lending figures to help support arguments for or against increasing their asset purchase program. We are still in the corner that the current markets confidence over the UK recovery is overly optimistic (supported by last week's weaker GDP release) and expect the sterling to come under pressure mid term. There is a plethora of events in the US session, which should keep trading choppy. On the economic front, durable goods orders is expected to correct slightly to -0.6% in June from a sharp rise of 1.8% in May. We also expect continued growth in core to support risk appetite and set the tone for a weaker USD. Tonight, the RBNZ is universally expected to hold rates at 2.50%. As usual, traders will be focused on the accompanying statement. Markets are concerned that the RBNZ will temper its easing policy (NZD positive) and/or would attempt to verbally intervene to weaken the currency (NZD negative).
| Global Indexes | Current Level | % Change |
| Nikkei 225 Index | 10,113.24 | 0.25 |
| Hang Seng Index | 20,124.96 | -2.42 |
| Shanghai Index | 3,266.43 | -5.01 |
| FTSE 100 Index | 4,548.92 | 0.44 |
| DAX Index | 5,213.29 | 0.74 |
| SMI Index | 5,779.66 | 0.29 |
| DJIA futures | 9,014.00 | -0.39 |
| World Markets | Current Level | % Change |
| Gold | 936 | -0.16 |
| Silver | 13.59 | -1.05 |
| VIX | 25.01 | 3 |
| Crude wti | 65.72 | -2.24 |
| USD Index | 78.93 | 0.11 |
| Todays Calender | Estimates | Previous | Country / GMT |
| NBP interest rate announcement, % 30-Jul | -- | 3.50% | PLN / -- |
| German Preliminary CPI, % m/m (y/y) Jul | 0.3 (-0.3) | 0.4 (0.1) | EUR / -- |
| ECB Bank lending survey published | -- | -- | EUR / 08.00 |
| BoE mortgage approvals, K Jun | 47 | 43.4 | GBP / 08.30 |
| BoE net mortgage lending, £ bn Jun | 0.6 | 0.3 | GBP / 08.30 |
| BoE net consumer credit, £ bn Jun | 0.3 | 0.3 | GBP / 08.30 |
| CPI, % y/y Jun | -- | 8 | ZAR / 09.30 |
| Fed Beige Book published | -- | -- | USD / 18.00 |
| FRB of New York President Dudley (FOMC voter) spea | -- | -- | USD / 12.30 |
| Durable goods new orders, % m/m (y/y) Jun | -0.5,-25.0 | 1.8,-23.5 | USD / 12.30 |
| Core capital goods orders, % m/m (y/y) Jun | -- | 4.7, -22.3 | USD / 12.30 |
| RBNZ rate decision % Jul | 2.50% | 2.50% | NZD / 21.00 |
| Town hall-style meeting with Fed Chairman Bernanke | -- | -- | USD / 22.00 |
| Industrial production, % m/m Jun | 2.4 | 5.7 | JPY / 23.50 |
Currency Tech
AUDUSD
R 2: 0.8520
R 1: 0.8379
CURRENT: 0.8215
S 1: 0.8090
S 2: 0.7925
USDCAD
R 2: 1.1225
R 1: 1.1010
CURRENT: 1.0848
S 1: 1.0545
S 2: 1.0440
EURJPY
R 2: 136.90
R 1: 136.10
CURRENT: 133.70
S 1: 132.10
S 2: 131.60
USDMXN
R 2: 13.645
R 1: 13.415
CURRENT: 13.243
S 1: 13.135
S 2: 13.060
- S: Strong, M: Minor, T: Trendline, K: Keylevel, P: Pivot
