Risk aversion was the flavor of the NY session as yesterday's equity market rally fizzled. The S&P 500 sank more than 17 points and closed below the 200-day SMA which came in at 884.99 today. This is a bearish technical signal, but we still need below the 875 support zone to shift the focus decidedly lower here. Oil came off the boil another -2.3% to a close below $63/bbl as concerns about sustainable global demand permeate the marketplace. This flight to safety benefited the USD first and foremost as the near 90% negative correlation with stocks witnessed in 2009 thus far was in full effect.

EUR/USD crumbled from a NY high by 1.4036 to just above the 1.3911 lows ahead of the close. The next important support lurks into 1.3877 and below opens up potential towards 1.3827 next. USD/JPY was heavy despite dollar strength as yen buying outpaced all else. The pair squeezed from a session high 95.35 to just pips above the 94.72 low. EUR/JPY was also crushed and sank from a 133.77 high to sit near 132.00 at last look.

The pummeling in the commodity complex saw the currencies of the resource-based economies punished as well. AUD/USD plunged from a 0.8023 NY open towards just below the 0.79 zone. USD/CAD meanwhile surged from 1.1582 towards 1.1655 in that span. The 1.1680/1.1700 zone should be decent resistance here and we would expect better sellers of the pair if global equities carve out a short-term bottom.

Upcoming Economic Data Releases (Asia Session)  prior   expected

  • 7/7/2009  23:01 GMT UK  Nationwide Consumer Confidence  JUN  53  55
  • 7/7/2009  23:50 GMT JN  Machine Orders (MoM)  MAY  -5.40%  2.40%
  • 7/7/2009  23:50 GMT JN  Current Account Total  MAY  Â¥630.5B  Â¥1503.3B
  • 7/7/2009  23:50 GMT JN  Trade Balance - BOP Basis  MAY  Â¥184.3B  Â¥410.0B
  • 7/7/2009  23:50 GMT JN  Bank Lending Banks Adjust YoY  JUN  3.90%  - -
  • 7/8/2009  1:00 GMT AU  Westpac Consumer Confidence  JUL  12.70%  - -
  • 7/8/2009  1:30 GMT AU  Home Loans  MAY  0.90%  1.30%
  • 7/8/2009  4:00 GMT JN  Bankruptcies (YoY)  JUN  -6.70%  - -
  • 7/8/2009   JN  Eco Watchers Survey: Current  JUN  36.7  - -
  • 7/8/2009   JN  Eco Watchers Survey: Outlook  JUN  43.3  - -