Market Brief
Asian equities are strongly higher today as a weak JPY boosted manufacturing names and NZ Retail Sales set a bullish tone to the session; Aug figures were 1.1% MoM vs. 0.5% expected (-0.5% prior), following the example set by Australian and US Retail Sales in convincingly beating forecasts. NZDUSD immediately popped from 0.7340 to 0.7380, and has managed to sustain these levels into the start of the European session. Despite the positive data and robust equity market performance, the USD has stayed firm (DXY 76.19) and correspondingly commodity prices are broadly flat on the day: gold $1055.70, silver $17.80, crude $73.
This morning’s data calendar has a raft of inflation figures out of Europe, kicking off with Swiss Producer & Import Prices for Sep (0.1% MoM exp, 0.1% prior) – considering the recent miss in CPI and the SNB’s high profile interventions on the CHF currency to fend off deflation, this will be keenly watched for any indications that deflation worries are founded or indeed, have abated. Next up is Swedish CPI (Sep) where inflation is forecast to have ticked up 0.4% MoM after posting a 0.2% gain last month, then UK CPI (Sep) where consensus estimates predict a 0.3% gain MoM vs. 0.4% in August. Other releases to expect include German ZEW economic expectations and later on the US Budget Balance.
In the earnings space, today will bring Johnson & Johnson and Intel Corp; with the latter likely to be the more important driver of market sentiment, however the major market moving events are likely to be tomorrow; with JPMorgan and Morgan Stanley reporting, coupled with the release of US Retail Sales and FOMC Minutes. So far markets have enjoyed a relatively smooth ride throughout the month as risk events have either passed without incident or bettered analyst forecasts. We still believe the USD weakness trend has further to go, but there is undoubtedly room for a correction if the outlook is soured by a downside surprise.
| Global Indexes | Current Level | % Change |
| Nikkei 225 Index | 10'076.56 | 0.6 |
| Hang Seng Index | 21'679.15 | 1.78 |
| Shanghai Index | 2'919.48 | 0.86 |
| FTSE 100 Index | 5'210.17 | 0.94 |
| DAX Index | 5'783.23 | 1.25 |
| SMI Index | 6'377.78 | 1.37 |
| S&P future | 1'070.90 | -0.06 |
| World markets | Current level | % Change |
| Gold | 1'055.54 | -0.15 |
| Silver | 17.78 | 0.4 |
| VIX | 23.01 | -0.48 |
| Crude wti | 73 | -0.37 |
| USD Index | 76.18 | 0 |
| Todays calender | Estimates | Previous | Country / GMT |
| CPI, % m/m (y/y) Sep | 0.4 (-1.4) | 0.2 (-0.8) | SEK/07:30 |
| CPI, % m/m (y/y) Sep | 0.2 (1.3) | 0.4 (1.6) | GBP/08:30 |
| RPI, % m/m (y/y) Sep | 0.3 (-1.5) | 0.5 (-1.3) | GBP/08:30 |
| Germany: ZEW economic expectations index Oct | 58 | 57.7 | EUR/09:00 |
| Budget Balance, $ bn (possibly delayed) Sep | -78 | 45.7 ('08) | USD/14:00 |
Currency Tech
AUDUSD
R 2: 0.9345
R 1: 0.9130
CURRENT: 0.9070
S 1: 0.8865
S 2: 0.8760
USDCAD
R 2: 1.0560
R 1: 1.0430
CURRENT: 1.0340
S 1: 1.0295
S 2: 1.0125
EURJPY
R 2: 134.20
R 1: 133.86
CURRENT: 133.10
S 1: 130.70
S 2: 129.60
USDMXN
R 2: 13.535
R 1: 13.385
CURRENT: 13.234
S 1: 13.183
S 2: 13.140
- S: Strong, M: Minor, T: Trendline, K: Keylevel, P: Pivot
