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US Session: Dollar Momentum Eases on Rising Risk Appetite
October 28, 2008 10:58 PM CET
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G10 Advancers and Decliners vs USD |
| | Nzd | 1.59 |  | | | Aud | 1.33 | | | | Sek | 0.85 | | | | Eur | 0.66 | | | | Dkk | 0.62 | | | | Nok | 0.62 | | | | Chf | 0.45 | | | | Gbp | 0.42 | | | | Cad | 0.16 | |  | Jpy | -0.84 | |
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Global Indexes |
Current Level |
% Change |
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| DJIA futures | 9,044.00 | - 0.50 | | S&P future | 935.30 | - 0.36 | | Nasdaq futures | 1,299.50 | - 0.65 | | FTSE futures | 3,910.50 | + 1.98 | | CAC futures | 3,112.50 | + 1.45 | | DAX futures | 4,686.00 | + 8.93 | | SMI Futures | 5,568.00 | + 1.59 |
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World Markets |
Current Level |
% Change |
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| Crude wti | 62.73 | - 0.78 | | Gold | 745.43 | - 0.20 | | Silver | 9.21 | + 0.11 | | USD Index | 87.03 | + 0.11 | | VIX | 66.96 | - 16.36 |
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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: 0.6752
R 2: 0.6331
R 1: 0.6250
CURRENT: 0.6188
S 1: 0.6026
S 2: 0.5929
S 3: 0.5882
EURJPY
R 3: 131.49
R 2: 127.33
R 1: 119.42
CURRENT: 118.36
S 1: 113.64
S 2: 112.79
S 3: 111.30
USDSGD
R 3: 1.5310
R 2: 1.5200
R 1: 1.5189
CURRENT: 1.5065
S 1: 1.4994
S 2: 1.4861
S 3: 1.4732
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Market Brief |
The dollar reversed some of its recent gains against the majors as risk appetite returned to the marketplace. The EurUsd rallied 200 pips to the low range of 1.27, while the UsdJpy posted strong gains up 460 pips to the mid 97 level. The GbpUsd picked up strong momentum finding resistance at 1.59, up a little over 340 pips in intraday trading. Equity markets surged in the US with the Dow increasing 10% back above the 9000 mark. European stock indexes also closed higher with the DAX leading the way up 11% on the day. Bond bonds experienced a strong selloff pushing the 10yr treasury yield up 15bps to 3.8%. Commodities picked up light gains in the energy sector with oil at $65bbl or 2.75% higher, while gold retreated to $745oz off 1.52% in the session.
Speculation that the ECB and BoJ will cut rates in the near future is one major point of discussion in the financial markets today. The speculation that the BoJ will reduce rates a quarter point sparked a strong move away from risk aversion. Traders may start to adhere to economic fundamentals some recent data like the German Ifo figure is suggesting the region is moving into a recession. German CPI is scheduled to be released tomorrow, with the decline in energy prices the reading should decline from prior levels. The euro has been rangebound between 1.23‐1.28, the pair should see continued volatility until larger institutions return to the market adding the necessary volume needed to stabilize the price swings. Data was light of the UK, but the Sterling continues to hold a strong degree of correlation to risk prone products like stocks and certain commodities. Mortgage approvals, money supply, and consumer credit data is all set to be announced tomorrow, which should give us further clarity of where the UK economy stands in the crisis.
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Asian Session - Are Markets Seeing a Bottom?
October 28, 2008 10:06 AM CET
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G10 Advancers and Decliners vs USD |
| | AUD | 0.85 | | | | NZD | 0.83 | | | | NOK | 0.33 | | | | CAD | 0.29 | | | SEK | -0.40 | | | GBP | -0.48 | | | EUR | -0.58 | | | DKK | -0.58 | | | CHF | -0.77 | | | JPY | -0.84 | |
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Global Indexes |
Current Level |
% Change |
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| Nikkei 225 Index | 7,621.92 | + 6.40 | | Hang Seng Index | 12,596.29 | + 14.34 | | Shanghai Index | 1,771.82 | + 2.81 | | FTSE 100 Index | 3,920.53 | + 1.76 | | CAC 40 Index | 3,094.99 | + 0.90 | | SMI Index | 5,543.17 | + 0.76 | | DJIA futures | 8,325.00 | + 3.92 |
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World Markets |
Current Level |
% Change |
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| Gold | 63.69 | + 0.74 | | Silver | 8.82 | - 2.68 | | VIX | 80.06 | + 1.17 | | Crude wti | 63.69 | + 0.74 | | USD Index | 87.19 | + 0.29 |
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Todays Calender |
Estimates |
Previous |
Country / GMT |
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| MPC’s Sir John Gieve speaks | 1 | 1 | UK / 9.00 | | CBI Distributive Trades Report (Oct) | -- | -27 | UK / 10.00 | | Case-Shiller 20-City House Price Index (Aug) | -16.6% | -16.4% | US / 12.00 | | Conference Board Consumer Conf. Index (Oct) | 52.0 | 59.8 | US / 13.00 | | ECB’s Bini Smaghi speaks on economic reform | -- | -- | EZ / 16.00 | | MPC’s Besley delivers keynote speech | -- | -- | UK / 16.20 |
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Currency Tech |
AUDUSD
R 3: 0.6752
R 2: 0.6331
R 1: 0.6250
CURRENT: 0.6188
S 1: 0.6026
S 2: 0.5929
S 3: 0.5882
EURJPY
R 3: 131.49
R 2: 127.33
R 1: 119.42
CURRENT: 118.36
S 1: 113.64
S 2: 112.79
S 3: 111.30
USDSGD
R 3: 1.5310
R 2: 1.5200
R 1: 1.5189
CURRENT: 1.5065
S 1: 1.4994
S 2: 1.4861
S 3: 1.4732
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Market Brief |
The Usd was stable in Asian session, as the equity markets trading lack conviction. The EurUsd traded down to 1.2331, before rallying back to 1.2587, while the UsdJpy traded up from 92.48 to 96.19. Wall Street finally closed lower after a long day of back and forth, but sellers lacked the usually fervor. Asian regional indexes are well in the green, as market confidence seems to be creeping back into trading and Japan's Finance Minister Nakagawa announcing a ban on naked shorts of Japanese stocks. Crude and gold prices were slightly firmer this morning. Yet the VIX is still well elevated at 80. Overall, there is s growing sense that FX markets have formed a base, as deleveraging take a temporary pause and an intraday rally in the G10 (selling of Usd & Jpy) should be considered. It should be noted that because of the massive slide in equity markets globally, there will be a required reallocation by asset managers at the end of the month, a move that should benefit the Usd specifically.
The markets have been buzzing with rumors of a potential Japanese physical intervention. Japan 's Finance Minister stated today that there is an agreement within the G7 that intervention to halt Jpy appreciation would be acceptable. A comment that was then reinforced by French finance minister Lagarde. However, the minister also mentioned that intervention would be conducted solely by Japan, without the cooperation of other nations. An important side note, but one that we had already pricing in, was ECB President Trichet being unambiguous in signaling a rate cut for next week's ECB meeting.
As we mentioned in yesterdays snapshot, Australia's RBA has been openly intervening in the FX market since Friday, similarly to interventions of 2000 / 2002, when the RBA last attempted to provide stability to the AUDs sudden depreciation. From our vantage point, the RBA is not looking to reverse the AUD downward trend but only to create a more orderly market and ensure liquidity.
With a drought in important economic data, the market will be watching developments in the equity markets to gauge whether we are at a bottom or…
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