Market Brief
US equity markets were boosted higher yesterday after analyst upgrades for Bank of America and Wells Fargo, followed by earnings released from Alcoa after the close. As the first major earnings focus of the week, the aluminium producer managed to produce its first quarterly profit since last year, against consensus forecast for a loss; no doubt exciting investors that Q3 may outshine even Q2’s earnings. The sell-off in the USD (now around -week lows, DXY 76.05) helped commodities advance higher, as gold hit new highs for a third straight day $1054.60) and silver powers up to $17.89.
Predictably, Asian stocks continued to rise for a third day on the back of improved sentiment, supported by Australia's jobless rate unexpectedly dropping to 5.7% last month. Expectations had been for the Unemployment figure to rise to 6.0% after last month’s 5.8% reading; the surprise improvement spurred AUDUSD to new 14 month highs at 0.9033 (currently 0.9015), dragging other major currencies higher against USD with it. NZD in particular has benefitted (trading at 0.7400), shrugging off comments from NZ Finance Minister, Bill English, that the level of the currency was uncomfortable.
The key events of the day will be the BoE and ECB rate meetings; despite no expectations for a change in rate from either committee, GBP traders will be wary of any expansion in the QE programme, as GBPUSD’s tentative recovery has been wholly reliant on USD weakness thus far (currently 1.5990). Meanwhile EUR bulls should be cautious of any rhetoric on EUR strength in the ECB press conference; numerous members including Trichet himself have been on the wires in recent weeks to highlight their preference for a strong USD and aversion to excessive currency moves; and any explicit reference to the FX are likely to present a stumbling block for EURUSD’s rally.
The remaining data releases to expect include Swedish Industrial Production, German Industrial Production, US Initial Jobless Claims and Wholesale Inventories. The earnings schedule today includes Marriott International (exp: 0.127) and PepsiCo (exp: 1.033), but the biggest headline releases will come next week with most of the major financial institutions due (JP Morgan, Morgan Stanley, Goldman Sachs, Citigroup).
| Global Indexes | Current Level | % Change |
| Nikkei 225 Index | 9'832.47 | 0.34 |
| Hang Seng Index | 21'323.54 | 0.39 |
| Shanghai Index | 2'779.43 | 0.9 |
| FTSE 100 Index | 5'108.90 | -0.57 |
| DAX Index | 5'640.75 | -0.3 |
| SMI Index | 6'260.15 | -0.27 |
| S&P future | 1'064.00 | 0.99 |
| World Markets | Current Level | % Change |
| Gold | 1'053.12 | 0.85 |
| Silver | 17.82 | 1.42 |
| VIX | 24.68 | -3.97 |
| Crude wti | 70.34 | 1.11 |
| USD Index | 76.11 | -0.37 |
| Todays Calender | Estimates | Previous | Country / GMT |
| Sweden: Industrial production, % m/m Aug | 0.8 | -0.5 | SEK/07:30 |
| UK: Halifax house price index, % m/m (3m y/y) Sep | 0.6 (-7.8) | 0.8(-10.1) | GBP/08:00 |
| Germany: Industrial production, % m/m Aug | 1.9 | -0.9 | EUR/10:00 |
| Cad: Housing Starts, k Sep | 148 | 150.4 | CAD/12:15 |
| US: Initial jobless claims, thous (4w ma) 03-Oct | 545 (545) | 551 (564) | USD/12:30 |
| US: Wholesale inventories, %m/m Aug | -1 | -1.4 | USD/14:00 |
Currency Tech
AUDUSD
R 2: 0.9325
R 1: 0.9130
CURRENT: 0.9040
S 1: 0.8645
S 2: 0.8570
USDCAD
R 2: 1.0825
R 1: 1.0650
CURRENT: 1.0535
S 1: 1.0530
S 2: 1.0420
EURJPY
R 2: 132.10
R 1: 131.15
CURRENT: 130.35
S 1: 129.60
S 2: 129.05
USDMXN
R 2: 13.815
R 1: 13.685
CURRENT: 13.346
S 1: 13.260
S 2: 13.195
- S: Strong, M: Minor, T: Trendline, K: Keylevel, P: Pivot
