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US Session: US GDP Tanks Leaving Dollar Mixed Among the Majors
January 30, 2009 10:55 PM CET
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G10 Advancers and Decliners vs USD |
| | Gbp | 1.21 |  | | | Jpy | 0.01 | |  | Cad | -0.44 | | | Nok | -0.47 | | | Chf | -0.66 | | | Eur | -0.98 | | | Nzd | -1.01 | | | Dkk | -1.02 | | | Sek | -2.06 | | | Aud | -2.15 | |
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Global Indexes |
Current Level |
% Change |
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| DJIA futures | 8,040.00 | - 0.89 | | S&P future | 834.70 | - 0.96 | | Nasdaq futures | 1,193.50 | - 1.04 | | FTSE futures | 4,130.00 | - 0.19 | | CAC futures | 2,983.50 | - 0.95 | | DAX futures | 4,384.50 | - 1.21 | | SMI Futures | 5,185.00 | - 0.29 |
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World Markets |
Current Level |
% Change |
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| Crude wti | 42.31 | + 2.10 | | Gold | 915.68 | + 0.77 | | Silver | 12.41 | + 0.28 | | USD Index | 85.75 | + 0.55 | | VIX | 44.17 | + 3.61 |
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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: 0.6844
R 2: 0.6732
R 1: 0.6682
CURRENT: 0.6443
S 1: 0.6418
S 2: 0.6291
S 3: 0.6077
EURJPY
R 3: 122.17
R 2: 119.56
R 1: 116.68
CURRENT: 115.08
S 1: 114.97
S 2: 113.75
S 3: 112.52
USDSGD
R 3: 1.5336
R 2: 1.5249
R 1: 1.5120
CURRENT: 1.5088
S 1: 1.4924
S 2: 1.4809
S 3: 1.4759
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Market Brief |
The Dollar was strong on heightened risk aversion due to weak economic data. The EurUsd dropped roughly 150pips finding support near 1.28, while the UsdJpy slipped 20pips to the high range of 89. The GbpUsd was the biggest gainer, picking up 1.2% or 200pips facing resistance at 1.45. Equity markets declined in the US and Europe, with the Dow down nearly 2% or 150pts sliding below the 8000 mark. Bond yields were mixed in the US, and remain volatile in Europe following growing concerns over sovereign credit. Commodities were also mixed with WTI (Crude oil) mostly unchanged at $41bbl, and gold surging 2.11% to $927oz.
The US economy was a dealt a heavy blow with the severe drop in GDP -0.5% to -3.8% (QoQ). While the actual figure was better than expected, the reading was extremely weak adding further evidence that the US is in a deep recession. Gold surged on the contraction in US growth, and most of the majors succumbed to the rise in dollar strength. The trend of economic weakness carried over into the Eurozone data, which showed a rise in unemployment to 8.0% and a lower than expected inflation figure of 1.1% vs. the estimated of 1.4%. ECB Presidents stated that the central bank is not scheduled to meet until March, at which point the rate should be lowered. A small possibility does stand that they meet sooner, to quell fears regarding the rapidly deteriorating economic situation. We remain bearish on the Euro as the current price does not reflect the state of the Eurozone. In the UK, the Gfk consumer confidence figure fell from -33 to -37, which was a larger than expected drop. The Sterling rallied despite the poor news, due mostly to the notion that most of the risk within the UK is priced in. We may see some interim strength at the early part of next week in the GbpUsd, but activity should stabilize shortly thereafter.
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Asian Session – Japanese Data Shows Marked Deterioration
January 30, 2009 10:51 AM CET
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G10 Advancers and Decliners vs USD |
| | JPY | 0.19 | | | | GBP | 0.11 | | | CHF | -0.42 | | | NZD | -0.73 | | | CAD | -0.84 | | | DKK | -0.88 | | | EUR | -0.90 | | | NOK | -0.95 | | | SEK | -1.10 | | | AUD | -1.60 | |
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Global Indexes |
Current Level |
% Change |
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| Nikkei 225 Index | 7,994.05 | - 3.11 | | Hang Seng Index | 13,278.21 | + 0.94 | | FTSE 100 Index | 4,222.18 | + 0.76 | | CAC 40 Index | 3,025.59 | + 0.50 | | DAX Index | 4,450.59 | + 0.50 | | SMI Index | 5,315.65 | + 0.81 | | DJIA futures | 8,153.00 | + 0.50 |
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World Markets |
Current Level |
% Change |
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| Gold | 920.10 | + 1.26 | | Silver | 12.53 | + 1.25 | | VIX | 42.63 | + 7.48 | | Crude wti | 41.78 | + 0.82 | | USD Index | 85.74 | + 0.54 |
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Todays Calender |
Estimates |
Previous |
Country / GMT |
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| BoE mortgage approvals, K Dec | 26 | 27 | UK / 9.30 | | BoE mortgage lending, £ bn Dec | 0.6 | 0.7 | UK / 9.30 | | BoE net consumer credit, £bn Dec | 0.7 | 0.8 | UK / 9.30 | | "Flash" HICP, % y/y Jan | 1.4 y/y | -0.1,1.6 Y | EZ / 10.00 | | Unemployment rate, % (sa) Dec | 7.9 | 7.8 | EZ / 10.00 | | GDP, % m/m Nov | -0.4 | -0.1 | CA / 13.30 | | GDP, % q/q saar Q4-A | -5.0,-0.5Y | -0.5,0.7Y | US / 13.30 | | GDP price index, % q/q saar Q4-A | 0.4,2.0Y | 3.9,2.6Y | US / 13.30 | | Employment cost index, % q/q Q4 | 0.7,2.9Y | 0.7,3.0Y | US / 13.30 | | Chicago PMI, index Jan | 34.2 | 35.1 | US / 14.45 | | U. Michigan consumer sentiment, index Jan-f | 61.9 | 61.9 | US / 14.55 |
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Currency Tech |
AUDUSD
R 3: 0.6844
R 2: 0.6732
R 1: 0.6682
CURRENT: 0.6443
S 1: 0.6418
S 2: 0.6291
S 3: 0.6077
EURJPY
R 3: 122.17
R 2: 119.56
R 1: 116.68
CURRENT: 115.08
S 1: 114.97
S 2: 113.75
S 3: 112.52
USDSGD
R 3: 1.5336
R 2: 1.5249
R 1: 1.5120
CURRENT: 1.5088
S 1: 1.4924
S 2: 1.4809
S 3: 1.4759
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Market Brief |
The Usd was stronger in the Asian Session, as risk appetite faded. The EurUsd traded lower from 1.2950 to 1.2866, while the UsdJpy fell from 90.00 to 89.20. We are noticing a slight divergence in trader's preference during boats of risk aversion. With heavy selling of the Eur while the Cad and Gbp are attracting buyers against the USD (and even more against the JPY). This could be in part due to jerky market conditions, due to thin liquidity and lack of conviction by traders. Yesterday's Wall Street session closed lower, as financials and weaker than expected US data weighed on sentiment. US new homes sales fell from 388k to a new record low of 331k (vs 405k exp), which suggests that house prices have further to decline. And US durable goods fell 2.6% m/m, echoing the widespread slump in demand, both domestically and from abroad. Early in the European session we are seeing pressure continuing on risky assets, with both Asian and European stock markets in the red.
In Japan, the economic data released was a real eye opener. Industrial production in Japan fell -9.6% m/m in December. A clear illustration on how the deteriorating global demand is disturbing the Japanese domestic economy .In addition, construction orders slid 27.3% y/y pushed by a -5.8% y/y collapse in housing starts. Vehicle production fell 25.2% y/y (representative of the global automotive industry). December's unemployment rate came in at 4.4%, vs. 4.1%. With Jpy still trading on risk aversion (but getting a lower push) and corporate and investor repatriation flows, the Jpy will continue to be supported. However, as risk appetite returns to the market and growth once again become the focus, we expect the Jpy to be sold heavily.
Today's US first estimate of fourth-quarter GDP will capture the markets attention. Market expect that real GDP contracted by 5.5% at an annualized pace. If correct, this will be the biggest quarterly drop in more than 25 years.
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