Daily Forex Snapshots

Light Trading as Market Awaits Closure of Fed Bailout Proposal

September 26, 2008 8:53 PM CEST

G10 Advancers and Decliners vs USD

	Nzd	0.53
	Jpy	0.44
	Gbp	0.21
	Chf	0.17
	Cad	0.13
	Eur	0.01
	Dkk	-0.01
	Nok	-0.01
	Sek	-0.42
	-Aud	-0.54

Global Indexes

Current Level

% Change

DJIA Index	11,015.00	- 0.03
S&P 500 Index	1,204.80	- 0.73
NASDAQ 100 Index	1,661.00	- 1.13
FTSE futures	5,142.00	- 2.09
CAC futures	4,187.00	- 1.29
DAX Index	6,138.00	- 1.57
SMI Index	6,875.00	- 1.43

World Markets

Current Level

% Change

Crude wti	106.01	- 1.86
Gold	885.20	+ 0.83
Silver	13.42	+ 1.59
USD Index	76.99	- 0.01
VIX	35.00	+ 6.64

Todays Calender

Estimates

Country / GMT

No Major Events Scheduled

Currency Tech

AUDUSD
R 3: 0.8534
R 2: 0.8519
R 1: 0.8469
CURRENT: 0.8288
S 1: 0.8279
S 2: 0.8011
S 3: 0.7802

EURJPY
R 3: 157.76
R 2: 156.99
R 1: 156.84
CURRENT: 154.12
S 1: 153.82
S 2: 150.79
S 3: 149.04

USDSGD
R 3: 1.4478
R 2: 1.4373
R 1: 1.4182
CURRENT: 1.4282
S 1: 1.4054
S 2: 1.3835
S 3: 1.3785

Market Brief

Market Commentary:
Light Trading as Market Awaits Closure of Fed Bailout Proposal
The Usd was mostly flat in the US trading session as the majority of the market anticipates the outcome of the Fed Bailout proposal, as this bill is delayed following party contentions. The EurUsd is marginally higher, up a little over 10 pips at the low range of 1.46, while the UsdJpy declined 50 pips to the low 106 level. The GbpUsd saw minimal gains rising 30 pips trading through intraday resistance to 1.84. The equity markets opened lower, but have since moved back to levels near yesterday’s close. Commodities were mixed as precious metals are becoming a flight to quality asset, due to historically tight yields. Oil is slightly lower trading at 105 down 2% on the day, while gold holds strength at 883. Bond yields tightened substantially with the 2yr seeing a retraction of 13bps, and the 10yr 4bps.

Further commentary from the ECB confirmed that the Eurozone slowdown will last for an extended period of time. German CPI declined less than expected at -0.1% vs. -0.2% est. this will have an adverse affect on the consumer as prices will need to decline further to lift current weak levels of demand. The BoE followed a similar trend as the US by injecting 40bln Gbp into money markets earlier this week. In addition, the central bank admitted the country was in a mild recession, one of which is not as severe as the previous three. With the current turmoil in the market a key question for Traders is to determine whether the downturn in the UK is fully priced into the cable. We hold a bearish stance in the long-term, but with the recent turn of events in the US we are likely to see interim strength in the GbpUsd over the next 3 months.

Washington Mutual, the US largest saving bank was seized by the FDIC and purchased by JP Morgan Chase for $1.9bln, following a previous bid for the bank of $7bln, a year ago. The consolidation of the US financial sector sets the stage for a new landscape in the overall markets. The combination of the delay in the Fed bailout bill, and the fall of an additional bank, the Usd is poised to serious declines over the next month.

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Asian Session - WaMu Fails and Bailout in Jeopardy

September 26, 2008 9:44 AM CEST

G10 Advancers and Decliners vs USD

	JPY	1.10
	NZD	0.41
	CHF	0.34
	GBP	0.26
	EUR	0.11
	DKK	0.08
	SEK	-0.05
	CAD	-0.07
	NOK	-0.31
	AUD	-0.49

Global Indexes

Current Level

% Change

Nikkei 225 Index	11,893.16	- 0.94
Hang Seng Index	18,789.17	- 0.76
Shanghai Index	2,293.78	- 0.16
FTSE futures	5,104.26	- 1.78
DAX futures	6,088.60	- 1.36
CAC futures	4,147.30	- 1.88
DJIA futures	10,845.00	- 1.57

World Markets

Current Level

% Change

Gold	873.63	- 0.47
Silver	13.20	- 0.48
VIX	32.82	- 6.73
Crude wti	105.80	- 2.05
USD Index	76.96	- 0.04

Todays Calender

Estimates

Country / GMT

KOF Swiss Leading Indicator (Sep)	0.54	0.68	SZ / 9.30
GDP (Q2 Final) (q/q Ann.)	+3.3%	+3.3%p	US / 12.30
Univ. of Michigan Cons. Conf. Index (Sep Final)	71.0	73.1p	US / 14.00

Currency Tech

Market Brief

The Usd fell in the Asian session, as the prospects of a quick bailout diminished. The EurUsd traded up to 1.4678 from 1.4562, while the UsdJpy dropped from 107.02 to 105.61. In late US session optimism grew as the Paulson Plan seemed to be reaching an agreement. Details emerged that the $700bn would be pieced into installments, with the US government getting equity warrants in companies participating. In addition, executive compensation would also be monitored and restricted for bank partaking. However, before the equity market could break open the champagne a rove group of conservative house republicans countered with an alternative solution based around mortgage insurance. Elsewhere, a WaMu was closed by the US government, with all it assets absorbed by JP Morgan. Once again, markets will be focused on developments in the Paulson Plan and the financial market turmoil over domestic fundamentals. Crude prices came off slightly to $106.20bbl. The Asian equity markets were red across the board and European stock markets are trading higher.

In New Zealand, q2 showed a contraction in GDP to -0.2%, which confirms that the country is in a recession for the first time in 10 years. The recession is expected to be mild, with the economy expected to rebound by q4 2008, as weaker EM growth, lower commodity prices and financial market turbulence will weigh on any recovery.

With no critical scheduled events or data releases in Europe, the market will be keeping its powered dry until the US session.

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