Daily Forex Snapshots

US Session: Dollar Climbing Bank as Equities Decline

December 09, 2008 11:33 PM CET

G10 Advancers and Decliners vs USD

	Cad	0.33
	Nok	0.13
	Gbp	0.08
	Chf	0.05
	Sek	0.05
	Eur	0.05
	Dkk	0.03
	Jpy	0.03
	Nzd	-0.07
	Aud	-0.16

Global Indexes

Current Level

% Change

DJIA futures	8,790.00	- 0.96
S&P future	896.50	- 0.91
Nasdaq futures	1,216.00	+ 0.33
FTSE futures	4,346.50	+ 1.01
CAC futures	3,276.50	+ 1.11
DAX futures	4,739.50	+ 0.01
SMI Futures	5,833.00	+ 0.40

World Markets

Current Level

% Change

Crude wti	43.94	+ 0.53
Gold	767.51	- 0.67
Silver	9.75	- 2.40
USD Index	86.30	+ 0.87
VIX	58.03	- 0.79

Todays Calender

Estimates

Country / GMT

No Major Events Scheduled

Currency Tech

AUDUSD
R 3: 0.6984
R 2: 0.6758
R 1: 0.6696
CURRENT: 0.6526
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: 118.74
S 1: 117.88
S 2: 115.88
S 3: 113.64

USDSGD
R 3: 1.5436
R 2: 1.5345
R 1: 1.5265
CURRENT: 1.5073
S 1: 1.4994
S 2: 1.4875
S 3: 1.4772

Market Brief

The dollar began to recover from the session lows as the risk aversion trade overwhelmed the marketplace. The EurUsd slid 45pips to the low 1.29 price area, while the UsdJpy declined further by 63pips to the low range of 92. The GbpUsd dropped substantially, down over 160pips to the mid 1.47 level. Equities were mixed with Dow down 242pts, while the stock indexes in Europe closed higher across the board. Bond yields tightened by 10bps on the 2yr and 10yr pushing rates at extremely low levels, this activity was largely influenced by expectations of Fed to purchase more securities. Commodities also traded lower with oil at $42bbl and gold marginally lower at $776oz.

There was light data out of the Eurozone, with German ZEW slightly better than expected at ‐45.2 vs. ‐57.0. The euro didn’t react strongly to the news, and assumed price behavior in‐line with the recent trend in risk appetite. In the UK, industrial production fell 1.7% versus the projected decline of 0.5%. Housing data also continued its negative streak, with DLCG UK house prices at its lowest levels since 1978 (‐7.4%). The Usd posted gains against most of the G10, with the exception of the yen, which upholds its status as the safe haven currency of choice. The VIX was mostly flat, which implies that volume is stronger and investors may be returning to the market easing some of the extreme price swings seen over the last couple of months.

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Asian Session - Japan's GDP Falls

December 09, 2008 10:02 AM CET

G10 Advancers and Decliners vs USD

	JPY	0.40
	CAD	0.08
	GPB	-0.20
	NOK	-0.41
	EUR	-0.45
	DKK	-0.48
	CHF	-0.59
	SEK	-0.76
	NZD	-0.83
	AUD	-0.97

Global Indexes

Current Level

% Change

Nikkei 225 Index	8,395.87	+ 0.80
Hang Seng Index	14,753.22	- 1.93
Shanghai Index	2,037.74	- 2.53
FTSE 100 Index	4,237.37	- 1.45
CAC 40 Index	3,208.20	- 1.21
SMI Index	5,743.47	- 1.29
DJIA futures	8,816.00	- 0.66

World Markets

Current Level

% Change

Gold	769.08	- 0.46
Silver	10.11	+ 0.05
VIX	58.49	- 2.40
Crude wti	43.38	- 0.75
USD Index	86.11	+ 0.63

Todays Calender

Estimates

Country / GMT

Trade in Goods and Services (Oct)	-£4.0bn	-£3.9bn	UK / 8.30
Manufacturing Output (Oct)	-0.5%(-3.2	-0.8%(-2.3	UK / 8.30
Industrial Production (Oct)	-0.5%(-3.2	-0.2%(-2.2	UK / 8.30
CLG House Prices (Oct)	-6.5%	-5.1%	UK / 8.30
ZEW Survey (Dec)	-57.0	-53.5	GE / 9.00
ECB’s Bini Smaghi speaks on global financial crisi	--	--	EZ / 10.00
Interest Rate Announcement	1.75%	2.25%	CA / 13.00
MPC’s Sentance speaks in London	--	--	UK / 13.30
Pending Home Sales (Oct)	-3.0%	-4.6%	US / 14.00

Currency Tech

Market Brief

The Usd was slightly weaker in the Asian session, as impending hopes of a new fiscal package aimed at aiding US automakers and stimulates the US economy. There is speculation that President-elect Obama's stimulus package could possibly top $1trn. At this point it’s too early to tell if we are witnessing a Christmas bounce or just short covering. The EurUsd traded to a high of 1.2967 before retracing to 1.2843, while UsdJpy continued to trend lower down to 92.39 from 93.07. Yesterday Wall Street closed higher, as sentiment shifter to optimistic. Asian regional indexes have failed to hold gains and are now trading lower. Commodities are still firm, with both crude and gold seeing slight gains.

In Japan, the Q3's GDP fell to -1.8& vs. -0.9% exp. The primary culprit was inventories and public sector demand. Industrial production for October showed that inventories are at the highest level since 2001, so we would expect that inventories would weigh on futures releases of GDP. Domestic demand printed at -1.0%, while external demand (both import and exports) was soft. Japan has been in a recession since November 2007 and with labor market and consumer sentiment under pressure, consumption looks to stay depressed. Any hopes of a near term recovery are low. However, the Jpy is not currently trading on domestic economic conditions and continues to gain support from larger macro factors at work.

In Australia, NAB Survey business conditions in November tumbled again to -17 index points (business confidence fell to -30). For the first time, the index is lower than in the 2000 domestic slowdown. It would be hard to argue that Australia is not in a recession given these indicators and we expect further economic deterioration in the near term.

In European session We expect German ZEW investor sentiment to fall a bit further in December, from what was already a troublingly low level.

The Bank of Canada's rate decision is announced today and we are expecting at 75bp cut. MMs have priced in roughtly 66bp worth of easing and consensus is for a 50bp cut. However, a weak domestic housing and other economic indicators showing steep deterioration warrant aggressive easing.

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