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US Session - Markets Shaken Up by Credit Related Issues
June 27, 2008 7:12 PM CEST
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G10 Advancers and Decliners vs USD |
| | NZD | 0.96 |  | | | AUD | 0.67 | | | | JPY | 0.61 | | | | CHF | 0.60 | | | | GBP | 0.30 | | | | DKK | 0.15 | | | | EUR | 0.14 | | | | SEK | 0.01 | |  | NOK | -0.14 | | | CAD | -0.21 | |
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Global Indexes |
Current Level |
% Change |
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| Nikkei 225 Index | 13,544.36 | - 2.01 | | Hang Seng Index | 22,042.35 | - 1.83 | | Shanghai Index | 2,748.43 | - 5.28 | | FTSE 100 Index | 5,529.90 | + 0.21 | | CAC 40 Index | 4,397.32 | - 0.65 | | DJIA Index | 11,373.54 | - 0.69 | | S&P 500 Index | 1,279.29 | - 0.28 |
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World Markets |
Current Level |
% Change |
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| Gold | 927.90 | + 1.15 | | Silver | 17.61 | + 2.59 | | VIX | 23.67 | - 1.08 | | Crude wti | 140.00 | + 0.97 | | USD Index | 72.44 | - 0.06 |
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Todays Calender |
Estimates |
Previous |
Country / GMT |
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Currency Tech |
AUDUSD
R 3: 0.9654
R 2: 0.9646
R 1: 0.9630
CURRENT: 0.9621
S 1: 0.9542
S 2: 0.9490
S 3: 0.9448
EURJPY
R 3: 170.00
R 2: 169.46
R 1: 168.60
CURRENT: 167.46
S 1: 166.79
S 2: 166.00
S 3: 165.55
USDMXN
R 3: 10.4695
R 2: 10.4690
R 1: 10.3880
CURRENT: 10.3015
S 1: 10.2640
S 2: 10.2500
S 3: 10.2000
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Market Brief |
The dollar continued to slide in the European session as credit concerns returned to the market. The EurUsd traded through 1.57, while the UsdJpy moved to the 106 level on accelerating Usd weakness. The GbpUsd broke its previous resistance level of 1.98 to trade higher at 1.99, we may see the cable touch previous highs against the dollar in the near-term. European equity markets were mostly flat with a slight movement to the downside on the DAX. Equities in the US fell, as commodities continue to rally with oil at 140, gold at 926, and silver at 17.50. Risk aversion is making its way through the global markets, with traders looking for performing asset classes, which is a primary reason for the continued rise in commodities. US bonds markets traded higher, while European govt. bonds experienced a sell off over night with widened spreads in UK gilts, French, Italian, and German 10yr bonds. Both corporate and mortgage spreads widened, which suggest that the US financials may be poised for additional writedowns on remaining holding in those asset classes.
In the Eurozone, consumer confidence came in slightly lower than expected at -17 vs. -16 expected. The Economic sentiment also dropped to 94.9 from 97.6, which was the weakest level in couple of years. Trichet released additional statements regarding inflation, maintaining the ECBs hawkish bias. The EurUsd and EurGbp should continue to see a rise based primarily on the possibility for increased yields and fundamental weakness in the US and UK. GDP in the UK was revised lower 0.1% to 0.3%, which reflects the decline of services sector growth. Consumer weakness will be a central issue in sustaining economic growth, while rising inflation and lower wages pose a serious challenge for the BoE.
Personal income and spending rose in the US, but a drop in the Michigan consumer sentiment survey to 56.4 from 56.8 placed further pressure on the dollar. A growing portion of the market is raising concerns that credit crisis may not be nearing an end. A trend of spread widening in various sectors is signaling that investors are pessimistic about near term outlook in the financial markets. A break in the commodities rally will be needed to see a return to riskier asset classes. We can expect to see continued dollar weakness due to limited economic growth and prolonged deterioration in the credit markets.
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Asian Session - Usd Falls as Oil Surges
June 27, 2008 10:08 AM CEST
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G10 Advancers and Decliners vs USD |
| | NZD | 0.33 | | | | CAD | 0.28 | | | | AUD | 0.28 | | | DKK | -0.02 | | | SEK | -0.03 | | | NOK | -0.06 | | | CHF | -0.06 | | | JPY | -0.09 | | | EUR | -0.19 | | | GBP | -0.20 | |
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Global Indexes |
Current Level |
% Change |
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| Nikkei 225 Index | 13,544.36 | - 2.01 | | Hang Seng Index | 21,988.63 | - 2.12 | | Shanghai Index | 2,788.37 | - 6.46 | | FTSE futures | 5,546.00 | - 2.56 | | CAC futures | 4,424.00 | - 0.24 | | DAX futures | 6,500.50 | - 0.44 | | DJIA futures | 11,500.00 | + 0.05 |
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World Markets |
Current Level |
% Change |
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| Gold | 914.90 | - 0.02 | | Silver | 17.38 | + 0.93 | | Crude wti | 139.54 | - 0.07 |
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Todays Calender |
Estimates |
Previous |
Country / GMT |
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| Current Account (Apr) | €15.3bn | -- | EZ / 8.00 | | National Accounts (Q1, 3rd Est.) q/q(y/y) | +0.4%(+2.5 | +0.4%(+2.5 | UK / 8.30 | | Balance of Payments (Q1) | £12.1bn | £8.5bn | UK / 8.30 | | EC Economic Confidence (Jun) | 97.1 | 96.5 | UK / 9.00 | | KOF Economic Barometer (Jun) | 1.09 | 1.00 | SZ / 9.30 | | Personal Income (May) | +0.4% | +0.2% | US / 12.30 | | Personal Income (may) | 0.7% | 0.2% | US / 12.30 | | PCE Deflator (May) | (+3.2%) | (+3.2%) | US / 12.30 | | Core PCE Deflator (May) | +0.2%(+2.1 | +0.1%(+2.1 | US / 12.30 | | Univ. of Michigan Cons. Conf. Index (Jun Final) | 56.7 | 56.7p | US / 14.00 |
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Currency Tech |
AUDUSD
R 3: 0.9655
R 2: 0.9648
R 1: 0.9604
CURRENT: 0.9582
S 1: 0.9490
S 2: 0.9448
S 3: 0.9405
EURJPY
R 3: 171.00
R 2: 170.00
R 1: 169.15
CURRENT: 168.17
S 1: 166.77
S 2: 166.00
S 3: 165.51
USDSGD
R 3: 1.3850
R 2: 1.3827
R 1: 1.3730
CURRENT: 1.3645
S 1: 1.3635
S 2: 1.3580
S 3: 1.3554
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Market Brief |
Usd was slightly stronger in the Asian session after yesterday surging oil prices and worries over growth punished the greenback. EurUsd pulled back from 1.5763 to 1.5724 while GbpUsd followed as 1.9897 to 1.9857. However, the easing of pressure goes against the bearish feel the Usd attracted over recent days and we expect further dollar weakness. US stock markets took a massive dive while crude push to it highest levels ever. Asian stock markets followed the US lower and European equities futures are pointing to a negative open.
Thursday was a red day for US equity markets, as it was for markets in Europe. The S&P500 was lower by nearly 3%, while the DJIA was off by just over 3%, and the NASDAQ by 3.3%. The S&P500 broke through the 1300 level, while crude was moving in the opposite direction crossing the $140 mark, before closing at a record of just under $140. US Economic news out on the day was decent, but was completely overlooked. The summer looks like it's going to be a long one...Oil prices shot up over $140 barrel after the head of OPEC stated that prices could hit $170 barrel this year. Goldman Sachs forecasted more write-downs for Citigroup and they also recommended selling auto shares, this news sent shivers through financial stocks.
Asian markets are unsurprisingly lower this morning, as the Nikkei declines 2.7%, the Hang Seng is down 1.8% and the MSCI A-P is lower by 2.4%. The region is set to return its worst H1 since 1992, as the credit crunch hits home.
In our view Japan's economic data was decidedly negative. Retail sales exceeded market expectations reaching 0.2% but has slowed since February's peak and when you carve out fuel consumption was -0.1% yoy. Household survey's showed real spending was down -3.2% vs. -2.1% exp and Auto sales slowed to 0.2%. In our mind just more evidence that Japan is facing significant headwind on both the domestic & international front and we expect Jpy to suffer.
In the European session markets will be watching EC Economic Sentiment Indicator. This indicator has recently been optimistic regarding economic activity in the euro zone but should fall further today. With the euro at elevated levels and global demand soft industrial confidence should also weaken. However with markets trading off commodity prices and stock markets we don't expect a soft figure will have significant effect on EurUsd strength. In addition, since we are expecting the ECB to hike and NFP to shed over 100k jobs 1.6000 doesn't seem impossible.
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