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European Session - US Data, More Weakness
March 17, 2008 3:40 PM CET
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G10 Advancers and Decliners vs USD |
| | JPY | 2.69 |  | | | CHF | 1.54 | | | | EUR | 0.59 | | | | DKK | 0.57 | | | | SEK | 0.42 | | | | NOK | 0.06 | |  | CAD | -0.83 | | | GBP | -1.02 | | | NZD | -1.91 | | | AUD | -2.00 | |
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Global Indexes |
Current Level |
% Change |
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| FTSE 100 Index | 5,494.00 | - 2.44 | | CAC 40 Index | 4,478.08 | - 2.48 | | DAX Index | 6,235.94 | - 3.34 | | SMI Index | 6,867.94 | - 3.70 | | DJIA Index | 11,878.31 | - 0.60 | | NASDAQ 100 Index | 2,183.22 | - 1.32 | | S&P 500 Index | 1,271.61 | - 1.28 |
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World Markets |
Current Level |
% Change |
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| Gold | 1,006.80 | + 0.38 | | Silver | 20.31 | - 1.71 | | VIX | 33.44 | + 7.31 | | Crude wti | 106.49 | - 3.39 | | USD Index | 71.42 | - 0.43 |
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Todays Calender |
Estimates |
Previous |
Country / GMT |
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| NAHB Housing Market Index (Mar) | 20 | 20 | US / 17.00 |
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Currency Tech |
USDJPY
R 3: 103.30 T
R 2: 101.22 M
R 1: 99.11 S
CURRENT 97.04
S 1: 95.75 M
S 2: 95.00 T
S 3: 79.70 K
GBPUSD
R 3: 2.0577 T
R 2: 2.0447 S
R 1: 2.0140 M
CURRENT 2.0058
S 1: 2.0100 K
S 2: 2.0000 P
S 3: 1.9630 K
EURUSD
R 3: 1.6000 S
R 2: 1.5905 S
R 1: 1.5771 M
CURRENT 1.5742
S 1: 1.5533 M
S 2: 1.5000 K
S 3: 1.4500 P
S: Strong, M: Minor, T: Trendline, K: Keylevel, P: Pivot
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Market Brief |
Usd was slightly stronger in European session as trader paired down bets against the Usd. US economy continued to deteriorate adding evidence (along with recent employment and retail sales figures) that the US is already in a recession. US industrial production fell by -0.5% and manufacturing output dropped by -0.1% led by a decline in motor vehicle output. In addition Empire manufacturing fell to rock bottom levels hitting -22.2 from -11.7 in Feb. The positive news was current account deficit unexpectedly narrowed to $172.9bn or 4.9% of GDP. The first time since 2004 that the figure was below 5.0%.
This week markets will remain on red alert for a joint intervention in the US dollar. Japanese MoF's Shinohara, responsible for intervention, has said that excessive FX moves are undesirable and would cooperate with Central Banks but would not comment on the specifics. We could expect the rhetoric & rumors to hit the markets hard and fast this week especially form the Eurozone and Japan, the two countries that theoretically should be under the most pressure from the weak Usd. At these levels we need to consider the possibility of a joint invention.
Given the Feds unorthodox approach to monetary policy these are considerable event risk surrounding the Fed meeting on Tuesday. Fed officials have made plenty of noise about not being a pawn to market expectations, but their actions in recent months suggests the opposite. On Friday the market was pricing in roughly 70bp but now we are pricing in 90bp. Given this shift it seem the market is thinking that there is a very high probability that the Fed goes 100bp. This still leaves the market 25bp -50bp above where we believe the Fed will end up by q4 2008. From an interest rate differential perspective we could therefore see the greenback weakening further.
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Asian Session - Fed Lowers Discount Rate
March 17, 2008 10:04 AM CET
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G10 Advancers and Decliners vs USD |
| | JPY | 2.52 | | | | CHF | 1.96 | | | | DKK | 0.89 | | | | EUR | 0.83 | | | | SEK | 0.79 | | | | NOK | 0.29 | | | GBP | -0.50 | | | NZD | -0.55 | | | CAD | -0.65 | | | AUD | -0.99 | |
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Global Indexes |
Current Level |
% Change |
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| Nikkei 225 Index | 11,787.51 | - 3.70 | | Hang Seng Index | 21,209.08 | - 4.62 | | Shanghai Index | 3,820.05 | - 3.59 | | FTSE futures | 5,639.50 | - 0.96 | | CAC futures | 4,498.50 | - 2.11 | | SMI Futures | 7,150.00 | - 1.35 | | DJIA futures | 11,802.00 | - 1.50 |
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World Markets |
Current Level |
% Change |
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| Gold | 1,025.64 | + 2.26 | | Silver | 21.32 | + 3.17 | | VIX | 31.16 | + 14.18 | | Crude wti | 111.60 | + 1.26 | | USD Index | 71.09 | - 0.78 |
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Todays Calender |
Estimates |
Previous |
Country / GMT |
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| Employment (Q4) q/q(y/y) | -- | 0.3%(+1.9% | EZ / 10.00 | | Current Account (Q4) | -$184.5bn | -$178.5bn | US / 12.30 | | Empire Manufacturing (Mar) | -6.0 | -11.7 | US / 12.30 | | New Motor Vehicles (Jan) m/m | 6.5% | 4.8% | CA / 12.30 | | Manufacturing Shipments (Jan) m/m | 1.0% | -3.4% | CA / 12:30 | | Net Foreign Purchase of US Securities (Jan) | $85.0bn | $60.4bn | US / 13.00 | | Industrial Production (Feb) | -0.1% | 0.1% | US / 13.15 | | NAHB Housing Market Index (Mar) | 20 | 20 | US / 17.00 |
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Currency Tech |
AUDUSD
R 3: 0.9600
R 2: 0.9499
R 1: 0.9473
CURRENT: 0.9281
S 1: 0.9202
S 2: 0.9122
S 3: 0.9066
EURJPY
R 3: 159.22
R 2: 157.96
R 1: 155.59
CURRENT: 153.44
S 1: 152.11
S 2: 150.00
S 3: 149.27
USDSGD
R 3: 1.4063
R 2: 1.3983
R 1: 1.3926
CURRENT: 1.3850
S 1: 1.3783
S 2: 1.3696
S 3: 1.3500
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Market Brief |
Usd was sharply lower in Asian session as the Fed cut the discount rate 25bp to 3.25% in an emergency meeting over the weekend. This move by the Chairman Bernanke is the first weekend action in three decades. The move was in part to alleviate credit squeeze pressuring the US economy and also aimed to provide financial support for JP Morgan’s $2.00 per share bid of Bear Sterns. The Fed's decision pushed the Usd to new lows with Eurusd spiking slightly above the psychological 1.5900 level and the UsdJpy & UsdChf both sliding to 95.78 and 0.9646 respectively. Looking forward at the week there seems little to support the Usd's collapse except actual central bank intervention. Problems within the US seems to be escalating with economic indicators pointing at a full blown recession with the crisis of the financial sector still uncertain (earnings of several large US banks including Goldman, Lehmans and Morgan Stanley will be released this week). Given the current bout of risk aversion and pressure on the equity markets we could expect the Jpy and the Chf to out perform (and high yielders to underperform) in the G10.
This week markets will remain on red alert for a joint intervention in the US dollar. Japanese MoF's Shinohara, responsible for intervention, has said that excessive FX moves are undesirable and would cooperate with Central Banks but would not comment on the specifics. We could expect the rhetoric & rumors to hit the markets hard and fast this week especially form the Eurozone and Japan, the two countries that theoretically should be under the most pressure from the weak Usd. At these levels we need to consider the possibility of a joint invention.
Given the Feds unorthodox approach to monetary policy these are considerable event risk surrounding the Fed meeting on Tuesday. Fed officials have made plenty of noise about not being a pawn to market expectations, but their actions in recent months suggests the opposite. On Friday the market was pricing in roughly 70bp but now we are pricing in 90bp. Given this shift it seem the market is thinking that there is a very high probability that the Fed goes 100bp. This still leaves the market 25bp -50bp above where we believe the Fed will end up by q4 2008. From an interest rate differential perspective we could therefore see the greenback weakening further.
17.00gmt - SNB's Roth speaks
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