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European Session - Waiting For Bernanke
March 18, 2008 6:30 PM CET
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G10 Advancers and Decliners vs USD |
| | NZD | 1.86 |  | | | AUD | 1.71 | | | | GBP | 0.85 | | | | SEK | 0.70 | | | | NOK | 0.43 | | | | EUR | 0.41 | | | | DKK | 0.38 | | | | CAD | 0.32 | |  | CHF | -0.09 | | | JPY | -1.23 | |
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Global Indexes |
Current Level |
% Change |
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| FTSE 100 Index | 5,575.70 | + 2.97 | | CAC 40 Index | 4,554.85 | + 2.98 | | DAX Index | 6,369.67 | + 3.01 | | SMI Index | 6,997.22 | + 3.29 | | DJIA futures | 12,205.00 | + 1.70 | | Nasdaq futures | 1,720.00 | + 1.79 | | S&P future | 1,304.00 | + 3.29 |
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World Markets |
Current Level |
% Change |
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| Gold | 1,005.90 | + 0.31 | | Silver | 20.31 | + 0.19 | | VIX | 29.27 | - 9.21 | | Crude wti | 107.36 | + 1.59 | | USD Index | 71.31 | - 0.20 |
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Todays Calender |
Estimates |
Previous |
Country / GMT |
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| Fed Interest Rate Announcement | 2.00% | 3.00% | US / 18.15 | | All Industry Activity Index (Jan) | 0.1% | -0.2% | JP / 23.50 |
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Currency Tech |
USDJPY
R103.30 T
R101.22 M
R99.11 S
CURRENT 98.26
S95.75 M
S95.00 T
S79.70 K
GBPUSD
R 3: 2.0577 T
R 2: 2.0447 S
R 1: 2.0271 M
CURRENT 2.0187
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: 1.5850 M
CURRENT1.5793
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 mixed in European session as trader await the Fed’s rate decision this afternoon. The GbpUsd was the big mover, stopping just short of 2.0200 as UK CPI printed higher.
We have seen a 0.3% rise in US producer prices in February which is a timely reminder that inflation is still bulwark yet to overcome. This is especially true after last week's news that underlined that consumer prices remained at par last month. With the exception of food and energy the PPI index suffered an increase of more than 0.5% last month.
Fed Fund futures are now pricing in 100% probability that Fed cuts 100bp to 2.00%. The downward adjustment to the discount rate during an emergency meeting underlines both the gravity of the financial crisis and the Fed’s resolve to pull out all the stops to prevent the situation from spiraling out of control. Perhaps the most disturbing aspect of the emergency move was that the Fed felt it couldn’t wait 48hrs when the market reaction might have been more positive then skeptical. The panicked move lends itself to speculation that the Fed knows something the market doesn’t (maybe about the rumors regarding Lehman). Clearly the recent rash of weak economic data such as the fall in payroll and retail sales as well as today’s industrial production figures point to a recession which warrant an aggressive action by the Fed. The market will be particularly keen on the accompanying comment to provide the justification for the Fed’s unorthodox approach to monetary policy - on the fly to say the least.
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Asian Session - Info Coming Fast & Furious
March 18, 2008 9:24 AM CET
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G10 Advancers and Decliners vs USD |
| | NZD | 1.43 | | | | AUD | 1.22 | | | | CAD | 0.57 | | | | NOK | 0.44 | | | | SEK | 0.29 | | | | EUR | 0.30 | | | | CHF | 0.26 | | | | DKK | 0.23 | | | | GBP | 0.20 | | | JPY | -0.46 | |
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Global Indexes |
Current Level |
% Change |
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| Nikkei 225 Index | 11,964.16 | + 1.49 | | Hang Seng Index | 21,310.74 | + 1.07 | | Shanghai Index | 3,668.90 | - 3.95 | | FTSE futures | 5,430.00 | - 3.71 | | CAC futures | 4,498.00 | + 1.44 | | SMI Futures | 6,769.00 | - 5.32 | | DJIA futures | 12,076.00 | + 0.63 |
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World Markets |
Current Level |
% Change |
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| Gold | 1,000.10 | - 0.26 | | Silver | 19.98 | - 1.04 | | VIX | 32.24 | + 3.46 | | Crude wti | 105.94 | + 0.24 | | USD Index | 71.28 | - 0.28 |
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Todays Calender |
Estimates |
Previous |
Country / GMT |
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| Consumer Prices (Feb) CPI | 0.8%(+2.5% | -0.7%(+2.2 | UK / 9.30 | | Core CPI | 1.4% | 1.3% | UK / 9.30 | | BoC CPI Core (Feb) m/my/y | 0.3%(1.2%) | 0.1%(1.4%) | CA / 11.00 | | Consumer Price Index (Feb) m/my/y | 0.3%(1.8%) | -0.2%(2.2% | CA / 11.00 | | Producer Price Index (Feb) | 0.3%(+6.8% | 1.0%(+7.4% | US / 12.30 | | Core Producer Price Index (Feb) | 0.2%(+2.1% | 0.4%(+2.3% | US / 12.30 | | Housing Starts (Feb) | 995,000 | 1,102,000 | US / 12.30 | | Housing Starts (Feb) | 995k | 1012k | US / 12.30 | | Fed Interest Rate Announcement | 2.00% | 3.00% | US / 18.15 | | All Industry Activity Index (Jan) | 0.1% | -0.2% | JP / 23.50 |
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Currency Tech |
AUDUSD
R 3: 0.9499
R 2: 0.9473
R 1: 0.9449
CURRENT: 0.9238
S 1: 0.9128
S 2: 0.9122
S 3: 0.9066
EURJPY
R 3: 159.22
R 2: 157.96
R 1: 155.59
CURRENT: 153.68
S 1: 151.81
S 2: 150.00
S 3: 149.27
USDSGD
R 3: 1.4063
R 2: 1.3983
R 1: 1.3926
CURRENT: 1.3788
S 1: 1.3768
S 2: 1.3696
S 3: 1.3500
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Market Brief |
News is coming in at a breath taking pace on the second day after Bear Sterns' demise. It will take a while for the market to fully digest the concept of the 5th largest US bank disappearing over last weekend. Risk aversion will stay elevated for a while. Usd was slightly weaker in Asian session as the markets await the Fed's rate decision this afternoon. The Fed's unorthodox approach to monetary policy has created a very anticipated environment. UsdJpy was range bound around the 97.00 level while EurUsd was able to reverse the Asian low and trended upwards to 1.5793. Carry trade which took a beating yesterday also fell into a tight range with AudJpy bouncing between 89 -90.00 lvl.
In Japan politicians continue to squabble over acceptable candidates to replace Gov Fukui which could leave the BoJ without a leader in a critical period with growing global financial crisis and a potentially disruptive strong Jpy. In response to Muto's rejection the government has proposed Koji Tanami, current governor of the Japan Bank for International Cooperation as a replacement. Even if Tanami accepts, the BoJ is likely to be fragmented and unorganized for a while which is going to send through the market lower anticipation for any change in monetary policy.
The markets will temporarily focus on UK CPI. This figure is likely rise as gas and electricity prices increase. In addition, producer output price inflation is expected to come in at an elevated level, creating a clear hazard that core goods inflation might start to move higher again unless retailers are willing to compress their margins. Given yesterday's massive Gbp sell-off there is considerable concern that the UK will follow the US down (destabilized by the same concerns about economic imbalances and the financial sector). The primary factor which is supporting the currency is the MPCs focus on inflation over growth concerns. Should inflation pressure lessen, which is very unlickly, emphasis will be shifting to fighting slowing growth. But given our outlook for UK CPI we believe inflation should give the Gbp short term support.
Given the unprecedented move by the Fed over the weekend we are in line with market consensus into now pricing a 100bp cut in fund rate to 2.00% on Tuesday. The downward adjustment to the discount rate over the weekend underlines both the gravity of the financial crisis and the Fed’s resolve to pull out all the stops to prevent the situation from spiraling out of control. Perhaps the most disturbing aspect of the emergency move was that the Fed felt it couldn’t wait 48hrs when the market reaction might have been more positive then skeptical. The panicked move lends itself to speculation that the Fed knows something the market doesn’t (maybe about the rumors regarding Lehman). Clearly the recent rash of weak economic data such as the fall in payroll and retail sales as well as today’s industrial production figures point to a recession which warrants an aggressive action by the Fed. The market will be particularly keen on the accompanying comment to clarify the justification for the Fed’s unorthodox approach to monetary policy - on the fly to say the least.
17.00gmt - ECB’s Mersch Speaks
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