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Asian Session : The “Big Three” Automakers fail to convince – Rescue package is a no go, for now.
December 12, 2008 8:57 AM CET
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G10 Advancers and Decliners vs USD |
| | JPY | 2.125 |  |  | CHF | -0.001 | | | GBP | -0.185 | | | EUR | -0.261 | | | DKK | -0.307 | | | NOK | -0.689 | | | SEK | -0.991 | | | NZD | -1.519 | | | CAD | -1.709 | | | AUD | -3.10 | |
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Global Indexes |
Current Level |
% Change |
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| Nikkei 225 Index | 8278.83 | - 5.07 | | Hang Seng Index | 14537.21 | - 6.90 | | Shanghai Index | 1978.135 | - 2.64 | | FTSE futures | 4354.3 | + 0.53 | | DAX futures | 4790.5 | - 0.88 | | DJIA futures | 8253 | - 3.70 | | Nasdaq futures | 1142.25 | - 4.01 |
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World Markets |
Current Level |
% Change |
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| Gold | 814.82 | - 0.80 | | Silver | 10.24 | - 1.11 | | VIX | 55.78 | + 0.09 | | Crude wti | 45.47 | - 5.23 | | USD Index | 83.328 | - 0.60 |
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Todays Calender |
Estimates |
Previous |
Country / GMT |
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| Advance Retail Sales | -1.8% | -2.8% | US / GMT 13:30 | | Retail Sales Less Autos | -1.7% | -2.2% | US / GMT 13:30 | | US Michigan Confidence | 55 | 55.3 | US / GMT 15:00 |
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Currency Tech |
AUDUSD
R 3: 0.6984
R 2: 0.6758
R 1: 0.6696
CURRENT: 0.6514
S 1: 0.6453
S 2: 0.6294
S 3: 0.6232
EURJPY
R 3: 124.61
R 2: 121.48
R 1: 120.98
CURRENT: 118.81
S 1: 117.88
S 2: 115.88
S 3: 113.64
USDSGD
R 3: 1.5345
R 2: 1.5265
R 1: 1.5114
CURRENT: 1.4933
S 1: 1.4904
S 2: 1.4875
S 3: 1.4772
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Market Brief |
The Yen rose to new highs against the majors this morning as traders flee the dollar. The Japanese currency reached new heights, momentarily touching 88.20 just as the U.S Senate announced its decision not to approve the $14Bn rescue package for the ailing U.S automakers. While the Yen traded steadily lower, EURUSD traded a very volatile 100pip range between 1.3300 and 1.3400. The unusual moves saw the Yen and Swiss currency rise as their safe haven status became all the more important. The decoupling between the equity markets and currency markets is all the more apparent as the dollar only momentarily slumps on the news, showing substantial resistance on the back of fund repatriation.
The Nikkei 225 fell 5% this morning, the Hang Seng declined 6%, while Shanghai fared slightly better managing to fall by 2%. Honda and Nissan Motor companies fall by 12% as their U.S index futures sink. The widespread implications of a “no deal” regarding the U.S Automakers sends the sector’s stocks around the world tumbling. A default on the part of either Chrysler or GM would exacerbate the already dire job market in the U.S and could cause the whole industry to collapse. The Japanese MoF (Ministry of Finance) has always said that if USDJPY fell below the $90 level it would have to intervene. The strong Yen is penalizing an already difficult situation – an economy predominantly hinged on exports.
When analyzing the events of this past night one must remember that when the U.S Government decided on the bailout for the Wall Street financials the Senate rejected the first attempt. Continuing disaccord on wages and insufficient guarantees of a radical revamp of the industry have kept the deal from going through. This said, having the Iconic Chrysler and GM fail in the last moments of the Bush administration would be yet another blemish in this administration’s already tainted legacy.
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US Session: FX Prices Deviate From Risk Aversion Trade, Gold and Oil Rally Strong
December 12, 2008 12:44 AM CET
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G10 Advancers and Decliners vs USD |
| | Nok | 0.27 | | | | Nzd | 0.14 | | | | Gbp | 0.09 | | | | Cad | 0.06 | | | Chf | -0.02 | | | Eur | -0.05 | | | Sek | -0.10 | | | Dkk | -0.10 | | | Aud | -0.11 | | | Jpy | -0.16 | |
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Global Indexes |
Current Level |
% Change |
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| DJIA futures | 8,486.00 | - 1.29 | | S&P future | 875.10 | - 2.31 | | Nasdaq futures | 1,185.00 | - 0.29 | | FTSE futures | 4,389.00 | + 0.52 | | CAC futures | 3,303.50 | - 0.39 | | DAX futures | 4,767.50 | - 0.87 | | SMI Index | 5,735.00 | - 0.31 |
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World Markets |
Current Level |
% Change |
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| Crude wti | 46.96 | - 2.13 | | Gold | 823.08 | + 0.21 | | Silver | 10.42 | + 0.63 | | USD Index | 83.83 | - 1.93 | | VIX | 55.78 | + 0.09 |
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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: 0.6984
R 2: 0.6758
R 1: 0.6696
CURRENT: 0.6597
S 1: 0.6453
S 2: 0.6294
S 3: 0.6232
EURJPY
R 3: 124.61
R 2: 121.48
R 1: 120.98
CURRENT: 120.37
S 1: 117.88
S 2: 115.88
S 3: 113.64
USDSGD
R 3: 1.5345
R 2: 1.5265
R 1: 1.5114
CURRENT: 1.5018
S 1: 1.4994
S 2: 1.4875
S 3: 1.4772
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Market Brief |
The dollar fell to its lowest levels in seven weeks against the majors displacing the recent trend trading across the financial markets. The EurUsd rose over 300 pips to the low 1.33 price area, while the UsdJpy fell 137pips to the mid range of 91. The GbpUsd gained 245pips to the low 1.50 level, marking the decoupling of the risk aversion trade which has been a consistent theme in the market over the last several weeks. Equity markets performed poorly with the Dow sliding 2.24% or 196pts on weak economic data and delays with the auto sector bailout. Bond yields were mixed with the 2yr tighter by 2bps and the 10yr flat, both of which remain at abnormally low levels. Commodities posted strong gains with the crude oil up 10.25% at $47bbl, and gold increased 1.5% to $822oz on dollar weakness.
There was limited data out of the Eurozone, but Germany’s Finance Minister Peer Steinbrueck expressed some criticism regarding the way in which the BoE has handled the financial crisis thus far. He accused them of instituting “crass Keynesianism” to resolve the global slowdown. Despite Steinbrueck’s commentary, the UK plans have been received positively by domestic critics. From a trading perspective, the market clearly took their side in this debate as the Euro surged against the Sterling in today’s session. It is unclear how long the cable selling will last, but the perception that it is overvalued against the euro was asserted strongly through price activity. It important to note that MPC member David Blanchflower will retire at the expiration of his term in 2009, he is considered the most dovish within the committee.
Jobless Claims continued to rise, coming in worst than expected at 573k vs. 525k. The employment situation has deteriorated to severe levels, and the risk sentiment among investors will be directly affected by the Senate decision regarding the auto bailout. A failure within the auto sector will lead to a significant number of additional unemployed citizens, thus damaging consumer growth. PPI, retail sales, and Univ. of Michigan confidence data is all scheduled to be released tomorrow. Expectations should remain very cautious as there are few signals that indicate any improvement in the economic situation before year‐end.
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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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