Daily Forex Snapshots

European Session - FX Markets Jumpy

March 31, 2008 6:48 PM CEST

G10 Advancers and Decliners vs USD

	NOK	0.45
	CHF	0.41
	SEK	0.32
	EUR	0.18
	DKK	0.17
	JPY	-0.31
	GBP	-0.34
	AUD	-0.35
	CAD	-0.90
	NZD	-1.03

Global Indexes

Current Level

% Change

Nikkei 225 Index	12,265.00	+ 0.23
FTSE 100 Index	5,691.50	- 0.02
CAC 40 Index	4,707.07	+ 0.23
SMI Index	7,224.31	- 0.20
DJIA Index	12,265.50	+ 0.40
S&P 500 Index	1.322.71	+ 0.56
NASDAQ 100 Index	2,273.93	+ 0.56

World Markets

Current Level

% Change

Gold	929.03	- 0.21
Silver	17.67	- 1.25
VIX	25.75	+ 0.15
Crude wti	104.35	- 1.17
USD Index	71.63	- 0.07

Todays Calender

Estimates

Country / GMT

No Scheduled Releases

Currency Tech

AUDUSD
R 3: 0.9354
R 2: 0.9290
R 1: 0.9254
CURRENT: 0.9130
S 1: 0.9122
S 2: 0.9073
S 3: 0.8953

EURJPY
R 3: 160.00
R 2: 159.15
R 1: 158.35
CURRENT: 157.62
S 1: 155.90
S 2: 155.16
S 3: 153.02

USDSGD
R 3: 1.4136
R 2: 1.4046
R 1: 1.3940
CURRENT: 1.3793
S 1: 1.3741
S 2: 1.3696
S 3: 1.3500

Market Brief

Late European session could best be described as chaotic. After an uneventful Asian session Usd was all over the place as traders priced in mixed Eurozone data, better then expected US data and the effects of Paulson’s initiative…if any. In addition, Canada posted a GDP figure which outpaced estimates and failed to halt markets from speculating that the US economic slowdown will eventually spillover to its northern neighbor. Eurozone confidence fell and HICP inflation rose which further complicated the ECB’s task by continue to report elevated and rising inflation on the one side and slowing activity on the other. In the US, Chicago Purchasing Manager’s index rose to 48.2 vs. 44.5 exp providing a bright spot to economy under pressure and supporting speculation that the recession might not be as deep as originally anticipated. Secretary Paulson proposes the broadest overhaul of the US regulatory system since the great depression. The Usd was sold heavily at the early portions of the Paulson’s speech but quickly reversed and regained most of the earlier losses.

Asian Session - Quiet Open To Week

March 31, 2008 9:37 AM CEST

G10 Advancers and Decliners vs USD

	SEK	0.13
	NOK	0.09
	EUR	0.01
	DKK	0.01
	AUD	-0.02
	CHF	-0.06
	JPY	-0.21
	GBP	-0.28
	CAD	-0.37
	NZD	-0.46

Global Indexes

Current Level

% Change

Nikkei 225 Index	12,525.54	- 2.30
Hang Seng Index	22,851.89	- 1.85
Shanghai Index	3,472.71	- 3.00
FTSE futures	5,712.00	- 0.52
DAX futures	6,569.00	- 0.88
SMI Futures	7,157.00	- 0.20
DJIA futures	12,207.00	+ 0.23

World Markets

Current Level

% Change

Gold	934.14	+ 0.33
Silver	17.86	- 0.22
VIX	25.71	- 0.65
Crude wti	105.25	- 0.23
USD Index	71.78	+ 0.14

Todays Calender

Estimates

Country / GMT

Index of Services (Jan) (3m/3m)	0.5%	0.6%	UK / 9.30
CPI (Mar Prov.)	3.3%	3.2%	EZ / 10.00
EC Economic Confidence (Mar)	100.0	100.1	EZ / 10.00
GDP (Jan) m/m	0.5%	-0.7%	CA / 13.30
Chicago PMI (Mar)	46.5	44.5	US / 14.45

Currency Tech

AUDUSD
R 3: 0.9354
R 2: 0.9290
R 1: 0.9254
CURRENT: 0.9154
S 1: 0.9122
S 2: 0.9073
S 3: 0.8953

EURJPY
R 3: 160.00
R 2: 159.15
R 1: 158.35
CURRENT: 157.18
S 1: 155.90
S 2: 155.16
S 3: 153.02

USDSGD
R 3: 1.4136
R 2: 1.4046
R 1: 1.3940
CURRENT: 1.3809
S 1: 1.3741
S 2: 1.3696
S 3: 1.3500

Market Brief

FX markets lacked motivation in a quiet Asian session. EurUsd bounced around 1.5761 -1.5817 levels while UsdJpy trended sharply upward from 98.82 to 100.18. Friday ended on a mixed note with stock markets weaker due to some weak US data (Michigan index) and energy and commodities price declined slightly. Over the weekend WSJ reported that Treasury Secretary Paulson would announce today “sweeping structural changes in the way the government monitors financial markets" giving the Fed broader authority to secure “market stability.” While we are skeptical of giving the Fed such broad powers with very little oversight we are bracing for a resurgence of risk appetite and will be focused on short Jpy trades this week. On this theme the BoJ Tankan report Tuesday will be of interest. Listening to comments last week it seems that the leadership vacuum has created a lack of unity on how to deal with the combination of growing price risk and slowing economy. While currently the BoJ has not officially adapted an easing bias the market is still pricing in 14bp cut within the next 12 months. JPY remains in favor due to risk aversion and declining carry appetite but these themes could come under pressure this week.

Another currency on our watch list this week is Gbp. BoE's King is also scheduled to speak. During the MPC testimony on the Feb inflation report last week the members were more pessimistic regarding the UK economy then previously. In addition, King voiced clear inflation risks, with CPI around 3%, however due to the extent of the economic downturn, he commented MPC is more inclined to cutting rates. We still believe that market hasn’t fully pricing in a full easing cycle by the BoE with rates slipping to 4.00% by end 2008 so the Gbp has additional room to depreciate.

12.30gmt - BoE's King speaks
15.00gmt - US Trsy Paulson speaks
17.00gmt - Fed' Yellen speaks

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