Market Brief
Yesterday morning the USD seemed poised for another brutal session of weakness as the DXY and most major currency pairs looked to have penetrated major technical levels, leaving very little barriers left to restrain the risk appetite trade. However despite JPMorgan reporting an estimate-busting EPS of 82c (consensus 51c) and global stock indices almost universally higher on the day, the DXY has managed to hold within a tight channel between 75.44-75.69 for most of the day. The first major item on the morning data schedule was UK ILO Unemployment Rate for Aug which surprisingly held firm at 7.9% vs. expectations of a rise to 8.0%. This prompted GBPUSD to rally strongly from 1.5945 towards the key resistance at 1.6040 (managing to touch a high of 1.6025), and pushed EURGBP back towards 0.9300 support. Next up we had Eurozone Industrial Production for Aug which was broadly neutral in its implications; the 0.9% gain MoM missed forecasts for a 1.2% rise, but there were compensating revisions to the month prior (0.2% from -0.3%).
The major afternoon release on the docket was US Retail Sales (Sep) which beat forecasts with a print of -1.5% MoM vs. -2.1% expected. The surprise was not as persuasive as first impressions might suggest, as last month’s cash-for-clunkers augmented figure of 2.7% in Aug was revised down to 2.2%. The FOMC followed later in the session, and as expected the committee revised up their forecasts for growth; however they also reiterated that rates would stay low for a long time and there was were mixed views about how the QE programme should be directed going forward; with one member looking for it to be increased and another looking for it to be scaled back. The sanguine view on the economic outlook coupled with the reassurance of low rates spurred the Dow Jones above the 10,000 mark to close at 10,015, and finally pushed the USD over the edge. EURUSD has since hit highs of 1.4967, AUDUSD looks to have broken upwards from its rising wedge to 0.9225, and USDCHF continues its march towards parity (1.0120 currently).
Gold is the notable laggard in this latest push, having re-tested highs at $1070 before paring back to $1065. Crude has continued to look firm just below $76, and Asian indices are also stronger on the day. Highlights in the coming sessions include Eurozone CPI and Swiss ZEW, before a raft of US figures in the afternoon including CPI, Empire State Manufacturing and Philadelphia Fed Manufacturing Index. The big earnings releases for the day include Goldman Sachs, Citigroup and Safeway.
| Global indexes | Current level | % Change |
| Nikkei 225 Index | 10'238.65 | 1.77 |
| Hang Seng Index | 22'081.50 | 0.89 |
| Shanghai Index | 2'991.83 | 0.72 |
| FTSE 100 Index | 5'256.10 | 1.98 |
| DAX Index | 5'854.14 | 2.45 |
| SMI Index | 6'405.92 | 1.34 |
| S&P future | 1'088.30 | 0.06 |
| World markets | Current level | % Change |
| Gold | 1'064.83 | 0.23 |
| Silver | 17.95 | 0.36 |
| VIX | 22.86 | -0.57 |
| Crude wti | 75.84 | 0.88 |
| USD Index | 75.24 | -0.41 |
| Todays calender | Estimates | Previous | Country / GMT |
| HICP, % m/m (y/y) Sep | 0.1 (-0.3) | -0.3(-0.3) | EUR/09:00 |
| ZEW Survey (Expectations) Oct | 59 | 58 | CHF/09:00 |
| Consumer Price Index, % m/m (y/y) Sep | 0.2 (-1.4) | 0.4 (-1.5) | USD/12:30 |
| Empire State manufacturing index Oct | 18 | 18.88 | USD/12:30 |
| Initial jobless claims, thous (4wk mvg avg) 10 Oct | 525 (534) | 521 (540) | USD/12:30 |
| Philadelphia Fed manufacturing index Oct | 12 | 14.1 | USD/14:00 |
Currency Tech
AUDUSD
R 2: 0.9475
R 1: 0.9345
CURRENT: 0.9220
S 1: 0.9125
S 2: 0.8985
USDCAD
R 2: 1.0400
R 1: 1.0320
CURRENT: 1.0215
S 1: 1.0127
S 2: 1.0055
EURJPY
R 2: 134.21
R 1: 133.88
CURRENT: 133.70
S 1: 132.50
S 2: 131.60
USDMXN
R 2: 13.330
R 1: 13.184
CURRENT: 13.048
S 1: 12.980
S 2: 12.750
- S: Strong, M: Minor, T: Trendline, K: Keylevel, P: Pivot
