Market Brief
The USD is lower against most currencies after improved Retail Sales figures and positive comments from Bernanke boosted investor confidence in the global outlook. EURUSD surged to its highest levels since December last year (1.4695), and AUD in particular is outperforming today after overnight Westpac figures surprised to the upside. The notable exception is GBP, which plummetted yesterday after Mervyn King’s dovish assessment of the UK economy, GBPUSD dropping nearly 250pips to the 1.64 level.
In Asia, stock markets were higher on improved investor sentiment from the US figures, but the big news was new Japanese Finance Minister Fujii on the wires; he noted possible merits to a stronger JPY, USDJPY and JPY-crosses were sharply lower.
Today we look for a continued theme of USD weakness as the global outlook appears to continue to improve, CPI data from Europe is expected to print 0.3% M/M reflecting higher energy costs. The afternoon is again busy with US CPI and Industrial Production likely to take centre stage; expectations are for a 0.3% M/M reading for CPI in August, whilst we look for Industrial Production to come out at 0.7% M/M.
Also keep an eye on gold today which broke through previous highs overnight to above the $1016, and given the recent upside surprises in inflation, note that crude has crept back above $70 per barrel.
| Global Indexes | Current Level | % Change |
| Nikkei 225 Index | 10,270.77 | 0.52 |
| Hang Seng Index | 21.330.12 | 2.22 |
| Shanghai Index | 2,999.17 | -1.12 |
| FTSE 100 Index | 5,080.15 | 0.75 |
| DAX Index | 5,668.85 | 0.7 |
| SMI Index | 6,240.04 | 0.43 |
| S&P future | 1,050.30 | 0.22 |
| World Markets | Current Level | % Change |
| Gold | 1,016.96 | 0.93 |
| Silver | 17.3 | 1.49 |
| VIX | 23.42 | -1.84 |
| Crude wti | 71 | 0.09 |
| USD Index | 76.33 | -0.25 |
| Todays Calender | Estimates | Previous | Country / GMT |
| Adjusted real retail sales, % y/y Jul | -- | 0.9 | SEK / 07.45 |
| Claimant count, change K Aug | 25 | 24.9 | GBP / 08.30 |
| ILO unemployment rate, % Jul | 7.9 | 7.8 | GBP / 08.30 |
| Average/core earnings growth, % 3m y/y Jul | 2.0/- | 2.5/2.5 | GBP / 08.30 |
| HICP, % m/m (y/y) Aug | 0.3 (-0.2) | -0.2 'flas | EUR / 09.00 |
| HICP ex tobacco, index (2005 = 100) (y/y) Aug | -- | 107.51 (-0 | EUR / 09.00 |
| ''Eurostat' core (HICP x fd, alc, tob, ene), % m/m | 1.2 | -0.6 (1.3) | EUR / 09.00 |
| ''ECB' core (HICP x unproc.fd, ene), % m/m (y/y) A | 0.2 (1.1) | -0.5 (1.2) | EUR / 09.00 |
| Consumer price index, % m/m (y/y) Aug | 0.3 (-1.7) | 0.0 (-2.1) | USD / 12.30 |
| Core CPI, % m/m (y/y) Aug | 0.1 (1.4) | 0.1 (1.5) | USD / 12.30 |
| CPI NSA, index Aug | -- | 215.351 | USD / 12.30 |
| Current account balance, $ bn Q2 | -92 | -101.5 | USD / 12.30 |
| Net long-term TIC flows, $ bn | -- | 90.7 | USD / 13.00 |
| Industrial production, % m/m (y/y) Aug | 0.7(-11.5) | 0.5(-13.0) | USD / 13.15 |
| Capacity utilization, % Aug | 69.1 | 68.5 | USD / 13.15 |
| NAHB housing index Sep | 19 | 18 | USD / 17.00 |
Currency Tech
AUDUSD
R 2: 0.8815
R 1: 0.8695
CURRENT: 0.8690
S 1: 0.8507
S 2: 0.8380
USDCAD
R 2: 1.1105
R 1: 1.0925
CURRENT: 1.0698
S 1: 1.0635
S 2: 1.0545
EURJPY
R 2: 135.00
R 1: 134.40
CURRENT: 132.89
S 1: 131.05
S 2: 129.35
USDMXN
R 2: 13.570
R 1: 13.545
CURRENT: 13.2714
S 1: 13.245
S 2: 13.110
- S: Strong, M: Minor, T: Trendline, K: Keylevel, P: Pivot
