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US Session: Sterling Collapsed After Confirmation UK Is In a Recession
November 12, 2008 9:11 PM CET
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G10 Advancers and Decliners vs USD |
| | Jpy | 2.16 |  | | | Chf | 0.42 | | | | Sek | 0.20 | | | | Eur | 0.13 | | | | Dkk | 0.09 | |  | Nok | -0.85 | | | Nzd | -1.59 | | | Cad | -1.85 | | | Aud | -2.14 | | | Gbp | -2.44 | |
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Global Indexes |
Current Level |
% Change |
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| DJIA Index | 8,385.00 | - 2.92 | | S&P future | 867.00 | - 2.91 | | Nasdaq futures | 1,187.00 | - 2.94 | | FTSE futures | 4,166.50 | - 1.88 | | CAC futures | 3,219.50 | - 3.20 | | DAX futures | 4,623.00 | - 3.25 | | SMI Futures | 5,692.00 | - 3.72 |
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World Markets |
Current Level |
% Change |
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| Crude wti | 56.65 | - 4.52 | | Gold | 721.10 | - 1.45 | | Silver | 9.43 | - 3.30 | | USD Index | 87.36 | + 0.33 | | VIX | 65.38 | + 6.41 |
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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: 0.7065
R 2: 0.7015
R 1: 0.6758
CURRENT
S 1: 0.6544
S 2: 0.6339
S 3: 0.6009
EURJPY
R 3: 128.44
R 2: 125.48
R 1:; 123.11
CURRENT
S 1: 121.23
S 2: 120.00
S 3: 115.00
USDSGD
R 3: 1.5304
R 2: 1.5161
R 1: 1.5103
CURRENT
S 1: 1.4875
S 2: 1.4772
S 3: 1.4647
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Market Brief |
The dollar has seen considerable strength due to greater risk aversion. The EurUsd is trading close to yesterday’s close at the low range 1.25, while the UsdJpy dropped more than 230pips to the low 95 price area. The GbpUsd experienced a sharp decline as the pair slid 420 pips to the mid 1.49 level. The equity markets tumbled with the Dow down 3.5% or 300pts, in addition the European Stock indexes were negative with the DAX lower by 3.0% or 140pts. Bond yields tightened to historical levels with the 2yr treasury at 1.18% and the 10yr at 3.64%. Traders scaled back commodity exposure as oil dropped to $56bbl, and gold at $716oz.
Eurozone industrial production fell 1.6% vs. 1.8% exp, this trend is likely to continue with the worsening economic conditions. The Euro was slightly stronger against the dollar in early trading, but has since trailed off toggling back and forth around the previous close. The central story in the FX market was the collapse of the cable, following BoE Governor Mervyn King’s statement regarding the UK economy. He affirmed that the UK is in a recession and that GDP expectations need to be revised downward to reflect the severity of the financial crisis. Traders reacted aggressively to this news pushing the pair to prices reminiscent of mid 2001.
Reformations to the TARP plan should have also play a major role in global financial markets. Cleary the US govt. bailout will be extended to firms outside the scope of the banking sector, specifically the auto industry. Dollar strength persists as a safe haven currency providing a false support to current levels. Once we see a return to riskier assets, the dollar should lose some momentum.
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Asian Session - Markets Look for Direction
November 12, 2008 10:21 AM CET
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G10 Advancers and Decliners vs USD |
| | NZD | 0.29 | | | | JPY | 0.23 | | | | AUD | 0.13 | | | CHF | -0.04 | | | CAD | -0.12 | | | DKK | -0.15 | | | EUR | -0.20 | | | GBP | -0.51 | | | SEK | -0.64 | | | NOK | -0.81 | |
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Global Indexes |
Current Level |
% Change |
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| Nikkei 225 Index | 8,695.51 | - 1.29 | | Hang Seng Index | 13,939.09 | - 0.71 | | Shanghai Index | 3,927.30 | - 0.81 | | FTSE 100 Index | 4,307.65 | + 1.43 | | DAX Index | 4,844.98 | + 1.75 | | SMI Index | 5,917.21 | + 0.61 | | DJIA futures | 8,656.00 | + 0.22 |
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World Markets |
Current Level |
% Change |
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| Gold | 735.05 | + 0.45 | | Silver | 9.79 | + 0.39 | | VIX | 61.44 | + 2.43 | | Crude wti | 58.48 | - 1.43 | | USD Index | 86.92 | - 0.18 |
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Todays Calender |
Estimates |
Previous |
Country / GMT |
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| Unemployment Rate (Oct) | 3.0% | 2.9% | UK / 8.30 | | Industrial Production (Sep) | -1.8%,-1.2 | 1.1%,-0.7 | EZ / 8.30 | | BoE Inflation Report (Nov) | -- | -- | UK / 9.30 | | ECB’s Stark & Trichet on Productivity in Fin. Sect | -- | -- | EZ / 15.00 |
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Currency Tech |
AUDUSD
R 3: 0.7065
R 2: 0.7015
R 1: 0.6758
CURRENT
S 1: 0.6544
S 2: 0.6339
S 3: 0.6009
EURJPY
R 3: 128.44
R 2: 125.48
R 1:; 123.11
CURRENT
S 1: 121.23
S 2: 120.00
S 3: 115.00
USDSGD
R 3: 1.5304
R 2: 1.5161
R 1: 1.5103
CURRENT
S 1: 1.4875
S 2: 1.4772
S 3: 1.4647
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Market Brief |
1The Usd was mixed in the Asian session, as deleveraging continued. A lack of economic data had markets just following previous trading trend. The EurUsd initially traded lower to 1.2478, before rally back above the 1.26 handle. The UsdJpy was once again range bound, jumping from 97.30 to 98.78. Asian regional indexes are currently mixed and Europe is trading higher. A regular data release have grounded to a halt, as markets are focusing on the upcoming G20 meeting, as well as the question surrounding the auto sector bailout in the US .
The main event will be the publication of the November Inflation Report at 10:30 GMT puitting the focus on the Gbp. The statement released with last-week's unexpected 150bp rate cut highlighted that the MPC was projecting an undershoot of the 2% CPI inflation target, based on the prevailing market rate expectations. However with the domestic economy collapsing the members focus is clearly on saving the economy and worrying about prices later.
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