For the third day in a row, risk aversion was in vogue in the NY session. US stock futures saw a very short-lived venture into positive terrain ahead of the open but stocks would never look back after slipping into the red. Comments out of Treasury Secretary Hank Paulson exacerbated the move lower. Paulson noted that the Treasury intends to abandon its prior goal of purchasing toxic mortgage assets from banks in lieu of direct capital injections. Equities did not take this well and ended the day down more than -5.2% when all was said and done.
Risk trades in FX followed suit as JPY crosses got pummeled. USD/JPY slipped more than -230 points in the session towards the 94.90/95 zone. EUR/JPY meanwhile was crushed more than -300 pips and was sitting near 118.70/80 as the session neared the close. This left EUR/USD pretty well unchanged in the session overall and the pair was currently just above the 1.2500 level. Critical support lurks near 1.2470 and the pair tested that area multiple times today. A break below here sees weakness accelerate in a big way.
Commodity currencies were sold heavily as oil continued its downward spiral. Crude slipped more than $3 and closed the session near the intraday lows by $55.75/bbl. The US Department of Energy lowered its 2009 oil forecast more than 40% to $63.50/bbl and this helped nudge the commodity lower, no doubt. USD/CAD was bid more than 230 points and was sitting near 1.2360/70 at the close. The 1.2380 area looks like the trigger for upside into 1.2450 next. Aussie saw a similar demise of around -200 pips into the 0.6380/90 zone. The RBA is rumored to be supporting the currency into the 0.6350 zone, but it is more likely that this will come on the way up and not on protection of a sharp move lower.
Upcoming Economic Data Releases (Asia Session) Prior Estimate
- 11/12/2008 23:50 GMT JN Domestic CGPI (MoM) OCT -0.40% -0.90%
- 11/12/2008 23:50 GMT JN Domestic CGPI (YoY) OCT 6.80% 5.50%
- 11/13/2008 0:00 GMT AU Consumer Inflation Expectation NOV 4.40% - -
- 11/13/2008 0:30 GMT AU Average Weekly Wages (QoQ) AUG 0.70% - -
- 11/13/2008 0:30 GMT AU Average Weekly Wages (YoY) AUG 3.70% - -
- 11/13/2008 1:00 GMT JN BOJ's Nakamura to Speak at Business Meeting in Matsuyama City 13-Nov
- 11/13/2008 4:30 GMT JN Industrial Production (MoM) SEP F 1.20% - -
- 11/13/2008 4:30 GMT JN Industrial Production (YoY) SEP F 0.40% - -
- 11/13/2008 4:30 GMT JN Capacity Utilization (MoM) SEP F -3.50% - -
