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Volatility Driving Markets Downward Dollar Trades Sideways
October 10, 2008 12:50 AM CEST
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G10 Advancers and Decliners vs USD |
| | Aud | 2.94 |  | | | Nzd | 0.60 | |  | Chf | -0.23 | | | Dkk | -0.27 | | | Eur | -0.37 | | | Sek | -0.56 | | | Jpy | -0.57 | | | Nok | -0.97 | | | Gbp | -1.32 | | | Cad | -1.66 | |
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Global Indexes |
Current Level |
% Change |
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| DJIA Index | 8,782.53 | - 5.14 | | S&P 500 Index | 928.62 | - 4.15 | | NASDAQ 100 Index | 1,306.00 | - 1.06 | | FTSE futures | 4,215.00 | - 3.90 | | CAC futures | 3,347.50 | - 4.28 | | DAX futures | 4,785.50 | - 5.39 | | SMI Futures | 5,899.00 | - 3.50 |
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World Markets |
Current Level |
% Change |
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| Crude wti | 85.51 | - 3.87 | | Gold | 905.86 | - 0.19 | | Silver | 12.00 | + 2.13 | | USD Index | 81.16 | + 0.31 | | VIX | 61.34 | + 6.62 |
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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: 0.7738
R 2: 0.7355
R 1: 0.7157
CURRENT: 0.6920
S 1: 0.6754
S 2: 0.6715
S 3: 0.6683
EURJPY
R 3: 148.69
R 2: 146.85
R 1: 144.97
CURRENT: 137.35
S 1: 134.56
S 2: 133.53
S 3: 130.50
USDSGD
R 3: 1.4859
R 2: 1.4760
R 1: 1.4726
CURRENT: 1.4692
S 1: 1.4489
S 2: 1.4458
S 3: 1.4374
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Market Brief |
The Usd rose slightly against most of the G10 despite another massive drop in multiple asset classes. The EurUsd fell roughly 50 pips to the low 1.36 level, while the UsdJpy rose over 60 pips to the high-range of 99. The GbpUsd collapsed over 200 pips below the 1.71 level, which is consistent with current economic conditions in the region. The Equity markets experienced substantial losses again, with the Dow down nearly 680pts falling below 9000. This is the seventh consecutive drop in the US indexes, as the VIX hit another historical high. Commodities were mixed with crude falling 4.6% to $84bbl, while gold traded higher to 912 from session lows of 882. Bond Markets show to increased risk aversion with the 2yr tighter by 14bps at 1.5%, this differs from yields on longer duration bonds which have been increasingly volatile. The shape of the yield curve remains normal, but atypically steep.
The dollar has taken its own course, despite the erratic behavior in other markets. We are looking for the Usd to carry its recent trend of strength throughout the fourth quarter based on deterioration in the European and Asian economies. Our 1m target for the EurUsd is 1.32 based on the likelihood of additional dollar strength capital inflows through buying in treasury securities. Credit risk was apparent through the 10% rise in the 2yr swap spread, which indicates risk perceived in interbank lending. The levels we are seeing in the rate markets is relative to the major corrections we are seeing in equities, and a central factor behind the migration of capital out of traditional investments into conventional savings facilities with little or no interest income attached.
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Although every investment involves some degree of risk, the risk of loss in trading off-exchange forex contracts can be substantial. Therefore if you are considering trading in this market, you should be aware of the risks associated with this product so you can make an informed decision prior to investing. The material presented here is not to be construed as trading advice or strategy. ACMUSA makes a strong effort to use reliable, expansive information, but we make no representation that it is accurate or complete. In addition, we have no obligation to notify you when opinions or data in this material change.
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Asian Session - Asian Stocks Rise as four regional central banks cut interest rates, only to give back gains.
October 09, 2008 8:05 AM CEST
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G10 Advancers and Decliners vs USD |
| | AUD | 3.64 | | | | NZD | 1.03 | | | | SEK | 0.38 | | | | NOK | 0.17 | | | | DKK | 0.04 | | | | CHF | 0.03 | | | | EUR | 0.01 | | | GBP | -0.11 | | | CAD | -0.24 | | | JPY | -1.29 | |
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Global Indexes |
Current Level |
% Change |
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| Nikkei 225 Index | 9299 | + 1.04 | | Hang Seng Index | 15841 | + 2.65 | | Shanghai Index | 2106 | + 0.69 | | FTSE futures | 4386 | - 5.34 | | DAX futures | 5057 | - 6.17 | | DJIA futures | 9247 | + 0.50 | | Nasdaq futures | 1334 | + 1.11 |
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World Markets |
Current Level |
% Change |
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| Gold | 893.83 | - 1.52 | | Silver | 11.62 | - 0.98 | | VIX | 57.53 | + 7.17 | | Crude wti | 87.85 | - 1.23 | | USD Index | 80.97 | + 0.08 |
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Todays Calender |
Estimates |
Previous |
Country / GMT |
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| GBP Trade Balance | -£4450 | -£4585 | GBP / 08:30 |
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Currency Tech |
AUDUSD
R 3: 0.7738
R 2: 0.7355
R 1: 0.7157
CURRENT: 0.6920
S 1: 0.6754
S 2: 0.6715
S 3: 0.6683
EURJPY
R 3: 148.69
R 2: 146.85
R 1: 144.97
CURRENT: 137.35
S 1: 134.56
S 2: 133.53
S 3: 130.50
USDSGD
R 3: 1.4859
R 2: 1.4760
R 1: 1.4726
CURRENT: 1.4692
S 1: 1.4489
S 2: 1.4458
S 3: 1.4374
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Market Brief |
The Dollar and Yen are weaker as Asian equities opened higher on the back of a unified rate cut by four regional banks. The Bank of Korea and Taiwan cut their rates by 25 basis points, while Hong Kong cuts to 2%.China cut it’s rates yesterday, in anticipation of the coordinated European cut. The Nikkei 225 initially rose by 1%, before giving them back, now trading -0.4%, BoJ is steadfast and holds at 0.5%. The Hang Seng is up 2.7% - financials leading gainers as bid to ease up credit markets spur trading.
In recent weeks we’ve seen the Yen and Dollar appreciate significantly as their low yielding nature and risk aversion drive markets. The EURUSD opened near 1.3580
Levels only to rise to 1.3700 two hours into Asian trading, on worries that rate cuts will not suffice to regain consumer confidence in the credit and financial markets. The Aussie moved higher as its central bank’s strong 1% rate cut earlier this week was bolstered by a liquidity injection of A$3.49Bn.
Volatility is at an all time high, all markets whether it be equities or forex are immensely choppy as continued uncertainty and low volumes are to blame. The Vix is up 7% at an unprecedented 57.53, the 52 week high being reached yesterday at 59.06. Crude continues to hold under $90 as demand drops and producers are forced to cut production. Gold rises and holds just under $900 as it becomes the only safe haven commodity one trusts.
One question to ask oneself is that how a concerted global rate cut will benefit the current markets if confidence is at an all time low, and no banks are lending?
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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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