Market Brief
An uneventful day yesterday as currencies washed around in unison with equity markets. The data calendar did little to inspire, with US Leading Indicators having no significant impact on USD; August reading came out at 0.6% vs 0.7% exp., but there were revisions higher to the month prior (0.9% from 0.6%). The ultimate result was USD net higher on the day (DXY 76.75), spurred by speculation ahead of tomorrow’s FOMC meeting about the withdrawal of QE.
Overnight the big news was NZD which traded at its highest levels in over a year (high 0.7186, currently 0.7165); the current account actually managed to post a surplus in the second quarter, and the annualized deficit reached its narrowest level in 4 years. The NZD was also spurred higher by dairy company Fonterra Co-Operative Group announcing a 12% boost to its forecast payout to shareholder-farmers due to stronger demand. RBNZ Governor Bollard was on the wires saying the economy was having a “patchy” recovery, and we will get further indication of this tomorrow with the GDP release.
The USD has retraced much of yesterday’s gains this morning after Asian equities were broadly higher overnight, catalysed by a host of brokerage upgrades. Commodities were acutely sensitive the USD moves; gold traded below $1000 (touching a low of $955.55) at the USD’s peak yesterday, but ended the day back around the $1003.70 level and is higher after the Asian session, trading just shy of $1007.
So far today we’ve already seen the release of Switzerland’s quarterly SECO Economic Forecasts and although the economy is forecast to shrink 1.7% during 2009 (up from the 2.7% decline forecast in June), the estimates for 2010 were flipped to growth of 0.4% from a 0.4% contraction. USDCHF was a little lower after the release, currently trading at 1.0295.
Japan is still on holiday so liquidity is slightly thinner in the FX space, the main data event today is Canadian Retail Sales (Jul), the market is expecting a 0.7% print M/M vs 1.0% prior. US releases include July’s House Price Index which is expected to remain at 0.5%, however the numbers have been notoriously volatile in recent months. Richmond Fed and ABC Consumer Confidence will also feature.
| Global Indexes | Current Level | % Change |
| Hang Seng Index | 21'582.05 | 0.51 |
| Shanghai Index | 2'921.34 | -1.54 |
| FTSE futures | 5'134.36 | -0.74 |
| DAX futures | 5'668.65 | -0.62 |
| SMI Index | 6'306.23 | -0.3 |
| S&P future | 1'062.00 | 0.15 |
| DJIA futures | 9'738.00 | 0.21 |
| World Markets | Current Level | % Change |
| Gold | 1'007.75 | 0.4 |
| Silver | 17.01 | 1.01 |
| VIX | 24.06 | 0.59 |
| Crude wti | 70.04 | 0.47 |
| USD Index | 76.47 | -0.39 |
| Todays Calender | Estimates | Previous | Country / GMT |
| Canadian Retail Sales (Jul), % m/m | 0.7 | 1 | CAD/12:30 |
| US: FHFA house price index, % m/m (y/y) | 0.5 (-3.9) | 0.5 (-5.0) | USD/14:00 |
| New Zealand : GDP % q/q | -0.2 | -1 | NZD/22:45 |
Currency Tech
AUDUSD
R 2: 0.8860
R 1: 0.8800
CURRENT: 0.8715
S 1: 0.8595
S 2: 0.8545
USDCAD
R 2: 1.0870
R 1: 1.0770
CURRENT: 1.0710
S 1: 1.0610
S 2: 1.0525
EURJPY
R 2: 136.00
R 1: 135.90
CURRENT: 134.75
S 1: 133.90
S 2: 131.05
USDMXN
R 2: 13.570
R 1: 13.545
CURRENT: 13.3350
S 1: 13.165
S 2: 13.110
- S: Strong, M: Minor, T: Trendline, K: Keylevel, P: Pivot
