The Veteran's Day holiday and subsequent US bond market close had traders focused squarely on the goings on in the equity market in the NY session.  Disappointing corporate earnings and talk of US automakers on the brink of insolvency helped nudge stocks lower.  US equities closed the day down -2.2% as the brief afternoon rally which almost saw stocks climb back into positive terrain could not be sustained.

This saw the risk trades in FX get pared as well with the USD the main beneficiary once again as traders look for a safe haven.  EUR/USD plunged more than -200 pips to a close near the 1.2520/25 zone.  The 1.2500 mark looks like the next key trigger for downside and with Euro-zone GDP numbers due up later this week (and likely to disappoint) we would not be surprised to see the pair test well below here.

The JPY crosses were expectedly lower as well.  EUR/JPY plunged more than -220 points and was sitting near 1.2220/30 after making a session high by the 125.00 level.  The pullback in USD/JPY was limited due to the strength in the greenback and the pair shed a modest -20 pips towards the 97.60/70 area.

Commodities also encountered some sharp selling and dropped more than -3.5% on the day as concerns about slowing global demand prevailed.  Oil dropped more than $3.50 to a close of $58.80/bbl.  The downside remains in place while below the critical $60/bbl level.  The declines in commodities helped nudge USD/CAD higher.  The pair surged about 150 pips and was sitting near 1.2070/75 at the NY close.  The path of least resistance here looks to be higher and we would not be surprised to see a move back into the 1.30/35 zone if oil prices continue their leg-down.

Upcoming Economic Data Releases (Asia Session)   Prior   Estimate

  • 11/12/2008 0:30 GMT AU Westpac Consumer Confidence NOV -11.00%
  • 11/12/2008 0:30 GMT AU Wage Cost Index QoQ 3Q 1.20% 1.00%
  • 11/12/2008 0:30 GMT AU Wage Cost Index YoY 3Q 4.20% 4.20%
  • 11/12/2008 1:00 GMT AU Treasury Secretary Ken Henry to address National Press Club
  • 11/12/2008 5:00 GMT JN Consumer Confidence OCT 31.8 - -
  • 11/12/2008 5:00 GMT JN Consumer Confidence Households OCT 31.4 30.1