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US Session: Investors Are Changing Their Tone Forcing Gold Prices to Rise While The Sterling Takes A Nosedive
January 23, 2009 8:54 PM CET
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G10 Advancers and Decliners vs USD |
| | Cad | 1.78 |  | | | Sek | 1.05 | | | | Nzd | 0.99 | | | | Nok | 0.48 | | | | Aud | 0.38 | |  | Jpy | -0.03 | | | Eur | -0.03 | | | Dkk | -0.04 | | | Chf | -0.25 | | | Gbp | -0.71 | |
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Global Indexes |
Current Level |
% Change |
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| DJIA futures | 8,020.00 | - 0.89 | | S&P future | 827.80 | + 0.28 | | Nasdaq futures | 1,179.00 | + 0.58 | | FTSE futures | 4,054.50 | + 1.09 | | CAC futures | 2,879.00 | + 0.35 | | DAX futures | 4,226.00 | - 0.22 | | SMI Futures | 5,246.00 | - 0.34 |
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World Markets |
Current Level |
% Change |
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| Crude wti | 45.93 | + 5.18 | | Gold | 895.55 | + 4.50 | | Silver | 11.89 | + 4.19 | | USD Index | 85.56 | + 0.04 | | VIX | 46.97 | - 0.68 |
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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: 0.7048
R 2: 0.6841
R 1: 0.6684
CURRENT: 0.6461
S 1: 0.6457
S 2: 0.6294
S 3: 0.6077
EURJPY
R 3: 122.17
R 2: 118.82
R 1: 117.21
CURRENT: 113.46
S 1: 113.99
S 2: 112.10
S 3: 111.30
USDSGD
R 3: 1.5339
R 2: 1.5265
R 1: 1.5120
CURRENT: 1.5074
S 1: 1.4921
S 2: 1.4805
S 3: 1.4759
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Market Brief |
Market fundamentals seem to be back in play with dollar strength consistent across most of the G10. The EurUsd dropped 125pips through 1.29, while the UsdJpy was mostly flat hovering very close to the previous session’s levels. The GbpUsd is off its lows for the session, but remains under considerable pressure down nearly 200pips at high range of 1.36. Equity markets are negative in the US and Europe with the Dow off 1.5% or 118pts and the SPX weaker by about 1% or 7pts. Bond Yields were very active, as Investors unloaded govt. debt across the treasury curve. The 2yr rate increased 10bps to .8%, we are well below historical levels, but concerns about sovereign credit is giving bond investors serious jitters. Commodities were mixed with the energy sector weaker across the spectrum with oil at $43bbl, clearly not the case in precious metals with gold surging 4.5% finding resistance $900oz.
In the UK, a worst than expected GDP number sent shockwaves through the financial markets. The reading was estimated to be ‐1.2%, but came in at ‐1.5% sending investors long UK related assets into a selling frenzy. The 10yr Gilt rates blew out nearly 20bps due to 3.6% showing signs the bubble in govt. backed debt may be popping. This information builds the argument for FX Traders to stay short the Sterling. Eurozone PMI data met expectations at 32but remain low levels, not providing much of a safehaven in the Euro as a currency.
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Asian Session –Markets Risk Appetite Short Lived
January 23, 2009 10:31 AM CET
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G10 Advancers and Decliners vs USD |
| | JPY | 1.01 | | | | CAD | 0.04 | | | CHF | -0.80 | | | NZD | -1.02 | | | DKK | -1.06 | | | EUR | -1.08 | | | NOK | -1.44 | | | AUD | -1.83 | | | SEK | -1.87 | | | GBP | -1.90 | |
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Global Indexes |
Current Level |
% Change |
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| Nikkei 225 Index | 7,745.25 | - 3.80 | | Hang Seng Index | 12,578.60 | - 0.67 | | Shanghai Index | 1,990.66 | - 0.71 | | FTSE 100 Index | 4,037.49 | - 0.36 | | CAC 40 Index | 2,868.00 | - 0.19 | | SMI Index | 5,339.85 | + 0.19 | | DJIA futures | 7,956.00 | - 1.61 |
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World Markets |
Current Level |
% Change |
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| Gold | 856.11 | - 0.10 | | Silver | 11.39 | - 0.21 | | VIX | 47.29 | + 1.87 | | Crude wti | 42.34 | - 3.02 | | USD Index | 86.40 | + 1.03 |
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Todays Calender |
Estimates |
Previous |
Country / GMT |
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| "Flash" manufacturing PMI, index | 32.0 | 32.7 | GE / 8.30 | | "Flash" services PMI, index Jan | 45.3 | 46.6 | GE / 8.30 | | "Flash" manufacturing PMI, index Jan | 33.2 | 33.9 | EZ / 9.00 | | "Flash" manufacturing PMI, input prices index Jan | -- | 32.8 | EZ / 9.00 | | "Flash" services PMI, index | 41.5 | 42.1 | EZ / 9.00 | | "Flash" composite PMI, index | 38.0 | 38.2 | EZ / 9.00 | | GDP - first estimate, % q/q Q4 | -1.2 | -0.6 (Q3) | UK / 9.30 | | Retail sales, % m/m Dec | -0.6 | 0.3,1.5Y | UK / 9.30 | | Consumer Price Index, % y/y Dec | -- | 2.0 | CA / 12.00 | | Bank of Canada core CPI, % y/y | .. | 2.4 | CA / 12.00 |
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Currency Tech |
AUDUSD
R 3: 0.7048
R 2: 0.6841
R 1: 0.6684
CURRENT: 0.6461
S 1: 0.6457
S 2: 0.6294
S 3: 0.6077
EURJPY
R 3: 122.17
R 2: 118.82
R 1: 117.21
CURRENT: 113.46
S 1: 113.99
S 2: 112.10
S 3: 111.30
USDSGD
R 3: 1.5339
R 2: 1.5265
R 1: 1.5120
CURRENT: 1.5074
S 1: 1.4921
S 2: 1.4805
S 3: 1.4759
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Market Brief |
The Usd was stronger in the Asian session, as risk aversion crept back into the markets. The EurUsd was stable for most of Asia, before collapsing from 1.3000 to 1.2808 in late session trading. The Jpy continues to show strong momentum, with UsdJpy trading from 89.35 to 88.17. Yesterday’s weak Wall Streets session has spilled over into Asian, with all regional indexes trading lower. European equity markets are currently not fairing much better. Volatility continues to increase both in FX implied vols and VIX index. Yesterday, the Central Bank of Russia announced an end to its measured devaluation strategy and placed the RUB basket trading band at 41.0 and 26.0 (upper band implies more than 10% depreciation from the current spot price). Cleverly, they also stated further adjustments to the band would depend on the price of oil. Tim Geithner restated the Treasury's strong USD policy & he also stated President Obama believes China is manipulating its currency and will look for FX policy changes.
The BoJ left the official rate unchanged at 0.10% as expected, while cutting its growth forecasts through March 2010 (in the interim update of its semi-annual ”Outlook for Economic Activity and Prices”.) Economic indicators released showed exports in December fell by 35% y/y, and the Tankan business confidence survey was -76 (vs. previous -64). The data just highlights the fact that the real economy will stay under considerable pressure in 2009 and we will be looking for opportunity to sell Jpy.
In the European session, UK's major release today is the preliminary estimate of Q4 GDP. Business surveys point to a contraction in GDP in Q4 that was even larger than the 0.6% q/q fall seen in Q3. At the same time, we expect retail sales figures to show a drop of -0.7%. These data are likely to add to the perceived weakness of the UK economy and to the downward pressure on the Sterling. While on the continent, German and Eurozone PMI figures expected to show further deterioration across both the manufacturing and services sectors.
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