Market Brief
The USD ended higher against most major currencies last weekc on risk reduction, as weak economic data prompted traders to take profits from the US equity market and sell the higher yielding assets. Consumer confidence, ADP employment, Chicago PMI, and non-farm payrolls were all worse than expected. Other factors also played a role in the dollar’s strength, as public officials from Sweden, Tokyo, and Gothenburg all called for a strong US currency, which is essential to the global economy, taking into consideration a weak dollar could hurt economies outside the US by making their exports more expensive. Interestingly, despite the general move lower in equities, crude oil rebounded last week.
Over the weekend the much hyped G7 made little impression on the FX markets (perhaps because of its declining relevance to G20). The official communiqué made no mention of the USD depreciation, although the greenback has suffered considerable and broad-based fall since the last meeting (especially against the EUR and JPY). Preceding the G7 meeting in Istanbul, Finance Minster Fujii said in reference to the yen that ''we will take appropriate steps if one-sided moves become excessive'', which doesn’t sound like the MoF is committed to intervening at these levels. And without official appetite, the USDJPY downside looks clear.
There are also a few central bank meetings in G10 space with the ECB, BOE and RBA meetings this week which should provide some activitly.Tomorrow the RBA is likely to rates on hold at 3.00%, though given last week's hawkish commentary from Governor Stevens, stronger retail sales and article in an Australian newspaper have increased the probability to close to 45%.
Later today we get ISM non-manufacturing, which we expect the composite index will jump to the 50 level, that separates contraction from expansion. On a side note, Q3 earning season will begin on Wednesday and could quickly temper risk appetite.
| Global Indexes | Current Level | % Change |
| Nikkei 225 Index | 9,674.49 | -0.58 |
| Hang Seng Index | 20,387.49 | 0.05 |
| Shanghai Index | 2,779.43 | 0.9 |
| FTSE 100 Index | 9,487.67 | -0.22 |
| DAX Index | 5,468.79 | 0.01 |
| SMI Index | 6,151.63 | 0.02 |
| S&P future | 1,025.50 | 0.37 |
| World Markets | Current Level | % Change |
| Gold | 1,004.75 | 0.19 |
| Silver | 16.3 | 0.83 |
| VIX | 28.68 | 1.45 |
| Crude wti | 69.6 | -0.5 |
| USD Index | 76.86 | -0.23 |
| Todays Calender | Estimates | Previous | Country / GMT |
| Services PMI, index Sep | 54.5 | 54.1 | GBP / 08.28 |
| Retail sales, % m/m (y/y) Aug | -0.5,-2.0 | -0.2, -1.9 | EUR / 09.00 |
| ISM non-manufacturing index Sep | 50 | 48.4 | USD / 14.00 |
| NZIER QSBO Q3 | -- | -25 | NZD / 22.00 |
Currency Tech
AUDUSD
R 2: 0.8943
R 1: 0.8860
CURRENT: 0.8739
S 1: 0.8530
S 2: 0.8319
USDCAD
R 2: 1.0990
R 1: 1.0960
CURRENT: 1.0768
S 1: 1.0672
S 2: 1.0590
EURJPY
R 2. 133.89
R 1: 132.12
CURRENT: 131.35
S 1: 129.05
S 2: 127.80
USDMXN
R2: 13.845
R 1: 13.790
CURRENT: 13.625
S 1: 13.495
S 2: 13.455
- S: Strong, M: Minor, T: Trendline, K: Keylevel, P: Pivot
