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US SESSION: Currency Market Continues Risk Aversion
October 27, 2008 11:20 PM CET
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G10 Advancers and Decliners vs USD |
| | Aud | 0.10 |  | | | Nzd | 0.04 | |  | Gbp | -0.14 | | | Chf | -0.18 | | | Cad | -0.20 | | | Jpy | -0.24 | | | Eur | -0.31 | | | Dkk | -0.32 | | | Nok | -0.42 | | | Sek | -0.57 | |
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Global Indexes |
Current Level |
% Change |
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| DJIA futures | 8,025.00 | + 0.18 | | S&P 500 Index | 834.60 | - 0.01 | | Nasdaq futures | 1,159.25 | - 0.24 | | FTSE futures | 3,834.50 | - 0.44 | | CAC futures | 3,068.00 | - 3.81 | | DAX futures | 4,302.00 | + 0.11 | | SMI Futures | 5,481.00 | - 3.47 |
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World Markets |
Current Level |
% Change |
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| Crude wti | 63.22 | - 1.45 | | Gold | 730.93 | + 0.02 | | Silver | 9.06 | - 0.10 | | USD Index | 86.93 | + 0.57 | | VIX | 80.06 | + 1.18 |
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Todays Calender |
Estimates |
Previous |
Country / GMT |
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| No Major Events Scheduled | | | |
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Currency Tech |
AUDUSD
R 3: 0.7239
R 2: 0.7076
R 1: 0.6752
CURRENT: 0.6066
S 1: 0.6057
S 2: 0.5929
S 3: 0.5882
EURJPY
R 3: 136.39
R 2: 131.48
R 1: 127.32
CURRENT: 114.45
S 1: 113.81
S 2: 112.79
S 3: 111.30
USDSGD
R 3: 1.5310
R 2: 1.5200
R 1: 1.5189
CURRENT: 1.5133
S 1: 1.4732
S 2: 1.4667
S 3: 1.4551
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Market Brief |
The extreme move towards risk aversion fueled another rally in Usd trading. The EurUsd fell 137 pips to the high range of 1.24, while the UsdJpy took a larger dive down 174 pips to the mid 92 level. The GbpUsd dropped over 370 pips placing the pair back to levels seen in 2002. The Equity markets extended its recent decline with the Dow leading US indexes in losses falling 2.42% to 8175. European stocks closed on a weaker note with the CAC 40 down 3.96%, FTSE off 1.72%, and the SMI off 3.07% at 5500. Bond yields were mostly flat, the 2yr saw slight increase of 2bps, while the 10yr was unchanged from the previous close. Commodities continued to soften with oil down 3.00% to $62.30bbl, and gold slightly lower at $730oz.
Trichet released a statement today suggesting that the ECB may look to cut interest rates next week, less than month after the central bank reduced rates 50bps in a coordinated move to address the financial crisis. It is unclear how much rates will be cut, he went on to say that it is a “possibility not a certainty.” German Ifo data declined to its lowest level seen in five years, which is evidentiary to the increasing downside risk to growth. The UK continues to struggle with housing woes, as falling home prices adversely affect the consumer. The outlook for the UK economy is bleak following statement by Mervyn King affirming that they are currently in a recession. We hold our expectations for the Sterling to trade through current support levels of 1.52, the fundamentals do not point to a stabilization in the near‐term.
New Home Sales surprised investors with a better than expected reading of 2.7% vs. the survey figure of ‐2.2%. The data lifted the equity markets for brief moment, but was not enough to ease volatility and overall risk aversion. The only currency in the majors which strengthened against the dollar was the yen as carry trades continue to unwind. It is likely that the trend trading will persists in the market until the global economy begins to recover.
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Asian Session - Deleverages Continues from Friday
October 27, 2008 9:48 AM CET
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G10 Advancers and Decliners vs USD |
| | JPY | 2.03 | | | CHF | -0.12 | | | CAD | -1.18 | | | NOK | -1.84 | | | DKK | -2.26 | | | EUR | -2.23 | | | SEK | -3.30 | | | NZD | -3.30 | | | GBP | -3.32 | | | AUD | -3.35 | |
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Global Indexes |
Current Level |
% Change |
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| Nikkei 225 Index | 7,162.90 | - 6.35 | | Hang Seng Index | 11,015.84 | - 12.70 | | Shanghai Index | 1,723.35 | - 6.32 | | FTSE 100 Index | 3,705.04 | - 4.59 | | DAX Index | 4,128.09 | - 3.90 | | SMI Index | 5,430.21 | - 4.31 | | DJIA futures | 8,001.00 | - 3.14 |
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World Markets |
Current Level |
% Change |
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| Gold | 714.90 | - 2.70 | | Silver | 8.90 | - 4.91 | | VIX | 79.13 | + 16.71 | | Crude wti | 61.95 | - 3.42 | | USD Index | 87.42 | + 1.13 |
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Todays Calender |
Estimates |
Previous |
Country / GMT |
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| IFO Business Climate Index (Oct) | 91.0 | 92.9 | GE / 8.00 | | ECB’s Trichet delivers keynote speech in Madrid | -- | -- | EZ / 12.55 | | New Home Sales (Sep) | 455K | 460K | US / 13.00 |
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Currency Tech |
AUDUSD
R 3: 0.7239
R 2: 0.7076
R 1: 0.6752
CURRENT: 0.6066
S 1: 0.6057
S 2: 0.5929
S 3: 0.5882
EURJPY
R 3: 136.39
R 2: 131.48
R 1: 127.32
CURRENT: 114.45
S 1: 113.81
S 2: 112.79
S 3: 111.30
USDSGD
R 3: 1.5310
R 2: 1.5200
R 1: 1.5189
CURRENT: 1.5133
S 1: 1.4732
S 2: 1.4667
S 3: 1.4551
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Market Brief |
After last week action, we are advising our clients not to fall in love with a direction and keep their perspective fluid. The outlook looks very hazy from our vantage point and we are bracing for anything. The Usd was stronger in the Asian session, as deleveraging intensifies. At the start of the week, we are seeing a continuation of last week trends with Usd, Jpy & Chf buying and EM, commodity currencies, carry trades and G10 all under significant selling pressure. The EurUsd traded down to 1.2469 from 1.2700, while the UsdJpy bounced around the 94.49 and 91.91 levels. Sterling, once again, took the brunt of markets fears, with the GbpUsd falling to 1.5423 from 1.5900. The UsdTry spiked upwards to 1.7200, while UsdKrw climbed to 1448.00 as the mass exodus from emerging markets continues. Commodities are under pressure, with Crude wti falling, despite OPECs supply 1.5 million barrel cut last week and gold is finding few buyers. Asian regional indexes have started this week on a gloomy note, with the Hang Seng down a whopping -12.15% and the Nikkei reaching a 26 year low. European futures are pointing to a lower open.
With the Yen trading well below the 100 lvl, markets are beginning to question when Japanese officials conduct physical fx interventions. While we don't believe Jpy pricing currently warrants a proactive approach…it is getting close. Verbal intervention has already started, with Finance Minister Nakagawa stating this morning that, "Currencies are having excessive movements. Excessive and disorderly FX moves may have negative effect on the economy. The MOF monitors the exchange market with a great interest." While the comment is very close to wording of G7 past statements we expect the volume and language of rhetoric to pick up markedly.
In reverse is the RBA, which was confirmed to have already intervened to buy AUD. While no official statement has been released, a RBA spokesman said that they "...were in to support the illiquid market..." Historically the RBA has intervened on the Aud behalf not to reverse the trend, but to slow the course.
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ACM Advanced Currency Markets SA (hereinafter referred as ACM) is a professional financial intermediary, directly regulated by the Swiss Federal Department of Finance, Anti Money Laundering Control Authority. As forex specialist, ACM provides only currency trading via highly professional forex trading software. All customers are aware that this information or any part thereof has been prepared without taking account of your objectives, financial situation and/or needs. This information is not intended as personalized investment advice and does not constitute a recommendation. It is not an offer or solicitation of any offer to purchase or sell any financial instrument. The analysis is based on the information which ACM finds reliable and accurate, but ACM does not assume any responsibility for any material nor for the transactions made on the basis of the information or the estimates of the analysis. ACM cannot guarantee that these forecasts will materialize and cannot be held liable in any way for direct, indirect and/or consequential loss arising from any use of this information, document or its content. All opinions and estimates constitute ACM analysis as of the data and are subject to change without notice. ACM does not warrant the accuracy or completeness of information contained herein, such information is subject to change and is not intended to influence your investment decisions. Past performance is not a reliable indicator of future performance.
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