Daily Forex Snapshots

Asian Session - Aud Retail Sales Fall

June 02, 2008 9:37 AM CEST

G10 Advancers and Decliners vs USD

	JPY	0.26
	CHF	0.19
	NZD	-0.01
	CAD	-0.02
	EUR	-0.04
	DKK	-0.04
	SEK	-0.07
	NOK	-0.10
	AUD	-0.29
	GBP	-0.33

Global Indexes

Current Level

% Change

Nikkei 225 Index	14,440.14	+ 0.70
Hang Seng Index	24,865.00	+ 1.35
Shanghai Index	3,459.04	+ 0.74
FTSE futures	6,041.00	- 0.55
DAX futures	7,117.00	+ 0.14
SMI Futures	7,525.00	- 0.19
DJIA futures	12,610.00	- 0.21

World Markets

Current Level

% Change

Gold	884.10	- 0.27
Silver	16.78	- 0.62
VIX	17.83	- 1.70
Crude wti	126.44	- 0.71
USD Index	73.02	+ 0.19

Todays Calender

Estimates

Country / GMT

Consumer Credit (Apr)	+£1.0bn	+£1.2bn	UK / 9.30
BoE Mortgage Approvals	65k	64k	UK / 9.30
CIPS/RBS Report on Manufacturing (May)	50.5	51.0	UK / 9.30
ISM Manufacturing Index (May)	48.5	48.6	US / 15.00
Construction Spending (Apr)	-0.6%	-1.1%	US / 15.00
ISM Price Paid (may)	85.0	84.5	US / 15.00

Currency Tech

AUDUSD
R 3: 0.9655
R 2: 0.9639
R 1: 0.9581
CURRENT
S 1: 0.9511
S 2: 0.9430
S 3: 0.9392

EURJPY
R 3: 164.98
R 2: 164.51
R 1: 164.21
CURRENT
S 1: 163.08
S 2: 162.26
S 3: 161.60

USDSGD
R 3: 1.3774
R 2: 1.3732
R 1: 1.3688
CURRENT
S 1: 1.3566
S 2: 1.3554
S 3: 1.3470

Market Brief

Usd was relatively unchanged in Asian session from Friday close. EurUsd opened around 1.5540 before slipping to 1.5520 on light trading. AudUsd came under light selling pressure as economic data disappointed the market falling sharply to 0.9513 from 0.9559. After a very strong two week performance for the greenback, it will be interesting to see if it can continue its winning way this week. With a light calendar in the US, markets will be watching the BoE, ECB, RBA and a few other G10 central banks rate decisions this week while any comments regarding inflation will be closely scrutinized. Last weeks Usd gain helped push energy prices down but the current elevated levels have policy makers worried about the impact on growth and spiraling inflation. WTI and Dubai crude are currently lower at 126.90 & 127.65 respectively and precious metals are also following this downward trend. Asian stock markets are higher and European index look to open mixed.

In Australia retail sales fell -0.2% vs. 0.2% exp, while the previous release was revised downwards. Retail sales in clearly in a soft patch, showing significant slowing in consumer spending due to higher interest rates and oil prices. Much of the recent Aud strength has been built around the RBA hawkish tone on inflation and with the central bank meeting tomorrow any decline in rhetoric will hurt Aud. It’s widely held that the RBA will hold at 7.25% and with rising global inflation expectations it will make addressing slowing domestic demand difficult. We are wary of Aud at these levels but would not stand in front of what has been strong momentum.

Switzerland released GDP q/q printing in line at 0.3% from 1.0% prior (y7y 3.0% vs. 3.3% exp). This figure show a moderating economy but at a regulated pace. In addition overall economic conditions are more positive than their neighbouring economies.

The highlight of the day will be US ISM manufacturing index which has been eerily stable and we doubt that this release will change anything about this trend. This will be good news for the Usd and anything less then rapid deprecation should be supportive.

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