Market Brief
Commodity prices continued their strong performances overnight, helping commodity producer stocks lead most Asian indices higher. Gold is on the highs around $1128, representing a gain of 2.8% in 2010 already, and crude oil remains elevated just below $82 a barrel. Sentiment has been buoyed by comments from the IMF’s John Lipsky that the organization would be revising higher its forecasts for global economic growth from 3.1%, and concurrently, the Baltic Dry Index, which we have long used as an indicator for global demand, rose for the first time in over a month yesterday – jumping around 4.5%. The reaction in FX markets has been one of widespread USD-selling; with EURUSD back above the 1.4460 technical level, and USDJPY now trading down at 91.75. The 14-day RSI on the dollar index (DXY) has now pared all the way back from its overbought levels on 22 Dec at 72.1 (where levels above 70 are considered overbought) down to neutral current levels of 52.5.
Looking ahead to today’s calendar we have Norwegian PMI which is expected to show a small uptick to 49.5 from last month’s 48.5; but it is likely that NOK will be more acutely influenced by the broader strength of commodity prices throughout the day. EURNOK’s plunge down through 8.2500 major support yesterday (led by the rally in commodities) suggests further downside is possible to 8.1400 next support. Out of the Eurozone, this morning’s German Unemployment reading is expected to remain stable at 8.1%, but the main focus will be on Eurozone CPI for December; which is expected to show a 0.9% YoY increase after November’s 0.6% print. Although, these figures are still well below the comfort zone of the ECB, the threat of deflation now seems unlikely.
In the afternoon session, US data includes Factory Orders and Pending Home Sales, but these are likely to be overshadowed by Wednesday’s FOMC Minutes and Friday’s Non-Farm Payrolls.
| Global Indexes | Current Level | % Change |
| Nikkei 225 Index | 10'681.83 | 0.25 |
| Hang Seng Index | 22'217.62 | 1.81 |
| Shanghai Index | 3'282.18 | 1.18 |
| FTSE 100 Index | 5'500.34 | 1.62 |
| DAX Index | 6'048.30 | 1.53 |
| SMI Index | 6'631.44 | 1.31 |
| S&P future | 1'128.40 | -0.04 |
| World Markets | Current Level | % Change |
| Gold | 1'127.47 | 0.56 |
| Silver | 17.72 | 0.8 |
| VIX | 20.04 | -7.56 |
| Crude wti | 81.84 | 0.4 |
| USD Index | 77.21 | -0.35 |
| Todays Calender | Estimates | Previous | Country / GMT |
| PMI, index sa Dec | 49.5 | 48.5 | NOK/08:00 |
| Germany: Unemployment rate, % Dec | 8.1 | 8.1 | EUR/08:55 |
| PMI construction, index Dec | 47.4 | 47 | GBP/09:30 |
| Flash HICP, % y/y Dec | 0.9 | 0.6 | EUR/10:00 |
| Factory orders, % m/m Nov | 0.5 | 0.6 | USD/15:00 |
| Pending home sales, % m/m Nov | -2 | 3.7 | USD/15:00 |
Currency Tech
AUDUSD
R 2: 0.9325
R 1: 0.9200
CURRENT: 0.9140
S 1: 0.8900
S 2: 0.8859
USDCAD
R 2: 1.0635
R 1: 1.0577
CURRENT: 1.0375
S 1: 1.0267
S 2: 1.0207
EURJPY
R 2: 134.55
R 1: 134.07
CURRENT: 132.75
S 1: 132.47
S 2: 131.65
USDMXN
R 2: 13.135
R 1: 13.125
CURRENT: 12.860
S 1: 12.815
S 2: 12.768
- S: Strong, M: Minor, T: Trendline, K: Keylevel, P: Pivot
