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US Session: Risk Aversion Returns to the Marketplace
January 12, 2009 11:54 PM CET
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G10 Advancers and Decliners vs USD |
| | Cad | 0.06 |  | | | Chf | 0.06 | | | | Nok | 0.03 | | | | Sek | 0.02 | | | | Eur | 0.02 | | | | Dkk | 0.02 | |  | Jpy | -0.07 | | | Gbp | -0.10 | | | Aud | -0.48 | | | Nzd | -0.50 | |
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Global Indexes |
Current Level |
% Change |
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| DJIA futures | 8,454.00 | + 0.12 | | S&P future | 870.10 | - 0.56 | | Nasdaq futures | 1,208.00 | + 0.17 | | FTSE futures | 4,402.00 | - 0.64 | | CAC futures | 3,247.50 | - 1.70 | | DAX futures | 4,739.00 | - 1.54 | | SMI Futures | 5,530.00 | - 1.93 |
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World Markets |
Current Level |
% Change |
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| Crude wti | 37.58 | - 7.96 | | Gold | 820.90 | + 0.01 | | Silver | 10.66 | + 0.01 | | USD Index | 83.02 | + 0.43 | | VIX | 45.84 | + 7.05 |
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Todays Calender |
Estimates |
Previous |
Country / GMT |
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Currency Tech |
AUDUSD
R 3: 0.7353
R 2: 0.7269
R 1: 0.7142
CURRENT: 0.6914
S 1: 0.6853
S 2: 0.6738
S 3: 0.6612
EURJPY
R 3: 127.67
R 2: 126.52
R 1: 125.28
CURRENT: 120.39
S 1: 120.42
S 2: 119.46
S 3: 117.54
USDSGD
R 3. 1.5114
R 2: 1.5010
R 1: 1.4972
CURRENT: 1.4872
S 1: 1.4755
S 2: 1.4675
S 3: 1.4502
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Market Brief |
The dollar rallied against most of the majors with the exception of the yen. The EurUsd dropped 108pips to the mid range of 1.33, while the UsdJpy declined 112pips to the low 89 price area. The GbpUsd dropped substantially, down roughly 350pips finding support at 1.48. Equity markets moved south on rising volatility and uncertainty regarding the financial markets. The Dow was off 1.46% or 125pts and the SPX dropped 2.26% or 20pts which was consistent with price behavior in other asset classes. Bond buyers were back in full swing, purchasing UST as all parts of the curve driving in yields as much as 8bps on the 2yr. Commodities were also subject to the selloff in risk, with oil down 7.6% at $37bbl, and gold slid 4% to $820.85oz.
Investors are awaiting the shift in administration with President Elect Obama coming to the White House. Significant changes to the TARP program, as well additional details regarding the Stimulus plan should be announced early into Obama’s arrival. These are critical to market participants who have capital tied up in Treasuries, as they need more information regarding Obama’s policies before they can make informed investment decisions. In the Eurozone, all eyes are on the ECB in regards to the rate decision on Thursday, January 15th. Traders are looking for a 50bps cut, anything short of this will cause massive reverberations throughout the market, specifically a rapid selloff in the Euro. President Trichet acknowledged the weakness in economic growth, and also expressed his dismal outlook for 2009. These statements sound dovish, but we should include the fact that the ECB suggested that will be a bit more apprehensive in terms of the pace at which they are cutting rates to avoid deflation. We would remain short the euro in the near-term, especially during these times of heightened volatility and risk aversion.
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Asian Session - Risk Aversion Returns on Weak NFP
January 12, 2009 10:10 AM CET
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G10 Advancers and Decliners vs USD |
| | JPY | 0.07 | | | CHF | -0.90 | | | EUR | -0.91 | | | DKK | -0.95 | | | SEK | -1.25 | | | GBP | -1.42 | | | CAD | -1.43 | | | NOK | -1.50 | | | NZD | -1.75 | | | AUD | -2.30 | |
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Global Indexes |
Current Level |
% Change |
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| Hang Seng Index | 13,971.00 | - 2.81 | | Shanghai Index | 1,900.35 | - 0.23 | | FTSE 100 Index | 4,444.07 | - 0.10 | | CAC 40 Index | 3,285.42 | - 0.49 | | DAX Index | 4,756.67 | - 0.56 | | SMI Index | 5,648.69 | - 0.89 | | DJIA futures | 8,503.00 | - 0.23 |
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World Markets |
Current Level |
% Change |
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| Gold | 845.25 | - 1.04 | | Silver | 11.12 | - 1.37 | | VIX | 42.82 | + 0.61 | | Crude wti | 39.76 | - 2.62 | | USD Index | 83.18 | + 0.62 |
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Todays Calender |
Estimates |
Previous |
Country / GMT |
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| Current account, ¥trn | 0.60 | 0.96 | JP / 23.50 |
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Currency Tech |
AUDUSD
R 3: 0.7353
R 2: 0.7269
R 1: 0.7142
CURRENT: 0.6914
S 1: 0.6853
S 2: 0.6738
S 3: 0.6612
EURJPY
R 3: 127.67
R 2: 126.52
R 1: 125.28
CURRENT: 120.39
S 1: 120.42
S 2: 119.46
S 3: 117.54
USDSGD
R 3. 1.5114
R 2: 1.5010
R 1: 1.4972
CURRENT: 1.4872
S 1: 1.4755
S 2: 1.4675
S 3: 1.4502
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Market Brief |
The Usd was stronger in the Asian session, as the rise in US unemployment reported on Friday is weighing on the investor's sentiment. The EurUsd slipped from 1.3478 to 1.3373, while the UsdJpy was range bound between 90.35 and 89.93 (the Japanese holiday today has made for trading quiet). As to be expected, the current risk appetite indicator, AudJpy, trended lower from 63.51 to 62.34. Friday's weak non-farm payrolls triggered a renewed bout of risk aversion, with the S&P down 2% and US 2yrs yield lower by 8bps. Currently, Asia 's regional indexes are trading lower and European futures are pointing to a soft opening. Crude is now trading below the $40bll handle, as fears of the global slowdown take on new momentum. We are expecting the Usd, Jpy, Chf to stay supported this week, as risk aversion and ECB rate decision take center stage.
For this week, the focus will be on Europe with the ECB Thursday rate announcement. Markets are expecting the ECB to cut rates by 50bp this week. However, last week's media reports have suggested that the ECB might hold rates. In the face of rapidly deteriorating economic conditions, we doubt the ECB members resolve to stay at 2.50%
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ACM Advanced Currency Markets SA (hereinafter referred as ACM) is a professional financial intermediary, directly regulated by the Swiss Federal Department of Finance, Anti Money Laundering Control Authority. As forex specialist, ACM provides only currency trading via highly professional forex trading software. All customers are aware that this information or any part thereof has been prepared without taking account of your objectives, financial situation and/or needs. This information is not intended as personalized investment advice and does not constitute a recommendation. It is not an offer or solicitation of any offer to purchase or sell any financial instrument. The analysis is based on the information which ACM finds reliable and accurate, but ACM does not assume any responsibility for any material nor for the transactions made on the basis of the information or the estimates of the analysis. ACM cannot guarantee that these forecasts will materialize and cannot be held liable in any way for direct, indirect and/or consequential loss arising from any use of this information, document or its content. All opinions and estimates constitute ACM analysis as of the data and are subject to change without notice. ACM does not warrant the accuracy or completeness of information contained herein, such information is subject to change and is not intended to influence your investment decisions. Past performance is not a reliable indicator of future performance.
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