Daily Forex Snapshots

Asian Session - Aud Confidence Rose

May 21, 2008 9:57 AM CEST

G10 Advancers and Decliners vs USD

	JPY	0.45
	CAD	0.41
	CHF	0.12
	NZD	0.02
	EUR	0.01
	AUD	-0.03
	DKK	-0.09
	SEK	-0.14
	GBP	-0.25
	NOK	-0.30

Global Indexes

Current Level

% Change

Nikkei 225 Index	13,926.30	- 1.65
Hang Seng Index	25.542.70	+ 1.12
Shanghai Index	3,544.19	+ 2.93
FTSE futures	6,227.50	+ 0.15
DAX futures	7,164.00	+ 0.21
SMI Futures	7,659.00	+ 0.20
DJIA futures	12,857.00	+ 0.05

World Markets

Current Level

% Change

Gold	920.50	+ 0.13
Silver	129.27	+ 0.22
VIX	17.58	+ 3.35
Crude wti	129.27	+ 0.22
USD Index	72.48	+ 0.10

Todays Calender

Estimates

Country / GMT

IFO Business Climate Index (May)	102.0	102.4	GE / 9.00
BoE MPC Minutes (May)	--	--	UK / 9.30
Public Finances (Apr) PSNB	+£1.5bn	£10.2bn	UK / 9.30
M4 Money Supply (Apr Prov.)	+0.6%(+11.	+0.8%(+11.	UK / 9.30
Consumer Price Index (april) m/m	0.4%	0.4%	CA / 12.00
Consumer Price Index (april) y/y	1.4%	1.4%	CA / 12.00
Leading Indicators (April) m/m	0.1%	0.0%	CA / 13.30
Fed Minutes Released (30th April Meeting)	--	--	US / 19.00
Retail Sales (Mar)	4.0%	6.1%	MX / 20.30

Currency Tech

AUDUSD
R 3: 0.9826
R 2: 0.9723
R 1: 0.9618
CURRENT: 0.9580
S 1: 0.9511
S 2: 0.9392
S 3: 0.9291

EURJPY
R 3: 163.88
R 2: 163.10
R 1: 163.04
CURRENT: 161.71
S 1: 161.27
S 2: 160.79
S 3: 160.14

USDSGD
R 3: 1.3850
R 2: 1.3774
R 1: 1.3732
CURRENT: 1.3638
S 1: 1.3633
S 2: 1.3571
S 3: 1.3554

Market Brief

Usd continued to trend downwards in Asian session as markets pondered the carry over effects of higher energy prices on the US economy. EurUsd trended up to 1.5686 in early Asia trading before easing slightly to 1.5650. EM Asia continued to strength against the Usd after last week's short squeez pushed currencies higher.

Tuesday saw profit-taking in the US markets, with the S&P500 and NASDAQ down nearly 1%, with the DJIA down 1.5%. Seven of the ten economic sectors finished lower, led by Telecom Services (-2.6%), Financials (-2.2%) and Consumer Discretionary (-1.6%). Financials were under pressure as an insightful analyst called for more trouble in the sector going into 2009 and perhaps beyond. Asian stock markets are lower this morning, with the Nikkei down 1.7%, the Hang Seng is lower by 0.7%, and the MSCI A-P down 1.4%. Markets had their biggest drop in five weeks, as ongoing credit loss concerns weigh on sentiment and bank earnings. Chinese demand also appears to be slowing, which would hurt raw-materials producers. ArcelorMittal bought a 15% stake in an Australian coal producer, Macarther Coal.

Crude prices continue to rise past wti $129.0/brl. 0. OPEC Secretary General Abdullah al-Badri said on Tuesday that he was "worried" because supply and demand factors were not behind high oil prices. In an interview with Reuters during a visit to Venezuela, Badri said oil prices could keep rising if non-market factors such as the weakening dollar continue to put pressure on prices but that OPEC would only act when market fundamentals showed a need to do so.

In Australia consumer confidence rose from a 15 year low up 2.7% in May. However, the weak level of consumer sentiment suggests slowing in consumption growth. AudUsd was relatively unchanged around 0.9595 lvls after a strong move to the upside prompted by the RBA hawkish minutes. Currently we are still bullish on the Aud which is also supported by renewed risk appetite and commodity prices. That said the risk that commodity prices suddenly unwind will a keep us vigilant.

On the continent the market will be expecting German Ifo index to decline and help build a case that GDP growth in Q2 will weaken. While the headline figure is still expect to stay above the long term moving average it suggest continued decline in economic activity (especially given yesterday slip in German ZEW). While the Eur could see a intra-day sell off due to the negative data, we should continue to see steady appreciation near term.

In the UK minutes of the MPC meeting in May will help determine the direction of rates and the thought process of the BoE. The recent push in CPI inflation to 3.0% and Inflation Report forecasting just under 4.0% has the market speculating that the rates stay on hold until late 2008.

18.00gmt - Fed's Walsh speaks

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