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US Session: Dollar Surges while Equity Markets Suffer Losses Globally
September 29, 2008 6:59 PM CEST
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G10 Advancers and Decliners vs USD |
| | Jpy | 0.87 |  |  | Cad | -0.54 | | | Chf | -0.56 | | | Nzd | -1.21 | | | Dkk | -1.41 | | | Eur | -1.44 | | | Aud | -2.13 | | | Sek | -2.17 | | | Gbp | -2.22 | | | Nok | -2.32 | |
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Global Indexes |
Current Level |
% Change |
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| DJIA Index | 10,888.34 | - 2.29 | | S&P 500 Index | 1,169.61 | - 3.58 | | NASDAQ 100 Index | 2,090.11 | - 4.27 | | FTSE futures | 4,874.00 | - 5.32 | | CAC futures | 3,974.00 | - 4.81 | | DAX futures | 5,880.00 | - 4.13 | | SMI Futures | 6,549.00 | - 4.74 |
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World Markets |
Current Level |
% Change |
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| Crude wti | 98.43 | - 7.92 | | Gold | 894.20 | + 1.76 | | Silver | 13.01 | - 2.18 | | USD Index | 77.83 | + 1.14 | | VIX | 39.83 | + 14.65 |
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Todays Calender |
Estimates |
Previous |
Country / GMT |
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| No Major Events Scheduled | | | |
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Currency Tech |
AUDUSD
R 3: 0.8520
R 2: 0.8470
R 1: 0.8380
CURRENT: 0.8184
S 1: 0.8240
S 2: 0.8010
S 3: 0.7802
EURJPY
R 3: 156.99
R 2: 156.85
R 1: 155.80
CURRENT: 152.52
S 1: 153.50
S 2: 153.10
S 3. 150.78
USDSGD
R 3: 1.4479
R 2: 1.4375
R 1: 1.4310
CURRENT: 1.4347
S 1: 1.4185
S 2: 1.4055
S 3. 1.4031
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Market Brief |
The Usd gained strength across the G10 based on closure talks regarding the Fed bailout proposal. The EurUsd slipped 200 pips to the low 1.44 price level, while the UsdJpy followed suit down106 pips finding support slightly below 105. The GbpUsd declined sharply, down over 360 pips to the high 1.80 price area on further turmoil in the housing and financial sectors. Equity markets faced extreme turbulence globally with the Dow in particular lower by nearly 300pts and the FTSE 100 closing weaker by 253pts. Equity investors have are concerned that the Fed bailout will not be enough to stabilize markets, and that it may put a serious constraint on greater US economy. Bond markets displayed a serious flight to quality among investors as secure assets become the scare in a deteriorating economic environment, the 2yr treasury yields are tighter by 25bps. Commodities were mixed with oil finding support at 100, and gold trading higher on risk aversion at 891.
Eurozone economic data came in line with expectations with the consumer confidence reading at -0.19 and the industrial confidence figure at -12. While this data met expectations, we should be cognizant of the fact that the expectations are negative. It is important that that we do not confuse that notion that the Eurozone data being in-line with that fact that the actual conditions point to further weakness. Personal income in the UK was higher than expected at 0.5% vs. the consensus figure of 0.2%, while personal spending was flat vs. estimates at 0.2%. There were a series of bank bailouts throughout the Europe, but the key component missing for a movement toward global recovery is an easing in rates by both the ECB and the BoE. The cable is likely to stay rangebound between 1.78-1.82 with a bias to the downside.
Further consolidation in the banking sector led to the purchase of Wachovia’s retail operations by Citigroup. This news combined with closure regarding the Fed bailout had substantial effect on the Usd.
The dollar is likely to continue to advance as the issues in the financial sector stabilize and more clarity is provided by the govt. as to what the economic outlook is post the approval of the Fed Bailout. The EurUsd is likely to trade within the range of 1.42-1.46, with a bias to the downside, but overall market volatility will dictate whether or not we see any drastic price moves following today’s activity.
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Asian Session - Usd Gains on Bailout Agreement
September 29, 2008 9:45 AM CEST
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G10 Advancers and Decliners vs USD |
| JPY | -0.34 | | | CAD | -0.88 | | | NZD | -1.43 | | | CHF | -1.55 | | | GBP | -1.62 | | | AUD | -1.75 | | | NOK | -1.91 | | | EUR | -1.90 | | | DKK | -1.92 | | | SEK | -2.05 | |
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Global Indexes |
Current Level |
% Change |
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| Nikkei 225 Index | 11,743.61 | - 1.25 | | Hang Seng Index | 18,118.25 | - 3.02 | | Shanghai Index | 2,293.78 | - 0.16 | | FTSE 100 Index | 5,047.16 | - 0.81 | | CAC 40 Index | 4,133.44 | - 0.71 | | SMI Index | 6,782.78 | - 0.48 | | DJIA futures | 11,013.00 | - 1.20 |
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World Markets |
Current Level |
% Change |
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| Gold | 871.10 | - 0.87 | | Silver | 13.01 | - 2.19 | | VIX | 34.74 | + 5.85 | | Crude wti | 103.70 | - 2.98 | | USD Index | 78.14 | + 1.54 |
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Todays Calender |
Estimates |
Previous |
Country / GMT |
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| EC Economic Sentiment (Sep) | 87.3 | 88.8 | EZ / 9.00 | | Consumer Confidence (Sep) | -19 | -19 | EZ / 9.00 | | Personal Income (Aug) | +0.2% | -0.7% | US / 12.30 | | Personal Spending (Aug) | +0.2% | +0.2% | US / 12.30 | | PCE Deflator (Aug) | +4.5% | +4.5% | US / 12.30 | | Core PCE Deflator (Aug) | 0.2%,+2.4% | 0.3%,+2.4% | US / 12.30 |
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Currency Tech |
AUDUSD
R 3: 0.8520
R 2: 0.8470
R 1: 0.8380
CURRENT: 0.8184
S 1: 0.8240
S 2: 0.8010
S 3: 0.7802
EURJPY
R 3: 156.99
R 2: 156.85
R 1: 155.80
CURRENT: 152.52
S 1: 153.50
S 2: 153.10
S 3. 150.78
USDSGD
R 3: 1.4479
R 2: 1.4375
R 1: 1.4310
CURRENT: 1.4347
S 1: 1.4185
S 2: 1.4055
S 3. 1.4031
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Market Brief |
The Usd was stronger across the board in the Asian Session, as US congressional leaders reached an agreement over the weekend. The EurUsd fell from 1.4636 to 1.4396 (through the 1.4505 directional trigger), while the UsdJpy trader higher to 106.96 from 105.68 sessionʼs lows. The GbpUsd slipped to 1.8181 from 1.8440 and Jpy fueled carry trades came under selling pressure, with the AudJpy dropping to 87.35. Despite the positive development in the financial markets, Asian equity indexes are trading lower, with the Hang Seng leading losers -2.66%. European stock markets are poised to follow Asia lower. Crude prices are stable around the $105.00bll level and Gold at $874.00. VIX is still well elevated at 34, reflecting the nervousness in the markets.
Reports are that a deal has been reached and suggest the House of Representatives will votes as early as today, which will send the bill to the Senate by Wednesday. The details of the bill, which have been released, differ from the original Paulson Plan, with the greatest variation in the inclusion of congressional oversight. The plan in breaks up the authorized $700bn, with $250bn to be issued immediately when legislation is passed, $100bn on presidential review and $350bn subjected to congressional review. In addition, the proposal states that firms that seek help will limit executive pay and stock warrants will be issued to taxpayers from institutions participating. As predicted, the greenback gained on the positive developments and we expect the currency to continue climbing, especially considering the negative news in both the financial sector and fundamentals in Europe . First, yesterday, the governments of Luxembourg , Holland and Belgium have announced they will inject capital into Fortis (Nationalized) and rumors of additional institutions (European & UK) in trouble are still hitting the wires. The highlight of the week will be the ECB rate decision and while we expect Trichet to hold at 4.25%, both market and economic conditions have weakened considerable
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