Daily Forex Snapshots

US Session: Sellers Continue to Drive Markets South Jpy Strengthens

November 17, 2008 7:04 PM CET

G10 Advancers and Decliners vs USD

	Gbp	1.91
	Cad	1.79
	Aud	1.32
	Eur	0.94
	Dkk	0.94
	Nzd	0.83
	Sek	0.44
	Chf	0.14
	Jpy	0.14
	Nok	-0.41

Global Indexes

Current Level

% Change

DJIA Index	8,497.31	- 3.83
S&P 500 Index	873.29	- 4.17
NASDAQ 100 Index	1,516.85	- 5.00
FTSE futures	4,157.00	- 1.76
CAC futures	3,220.00	- 2.14
DAX futures	4,603.00	- 2.92
SMI Futures	5,664.00	- 2.93

World Markets

Current Level

% Change

Crude wti	56.28	- 1.33
Gold	735.70	- 0.86
Silver	9.40	- 1.35
USD Index	87.01	+ 0.75
VIX	66.31	+ 10.83

Todays Calender

Estimates

Country / GMT

No Major Events Scheduled

Currency Tech

AUDUSD
R 3: 0.7065
R 2: 0.7015
R 1: 0.6758
CURRENT: 0.6551
S 1: 0.6390
S 2: 0.6339
S 3: 0.6009

EURJPY
R 3: 128.44
R 2: 125.48
R 1:; 123.11
CURRENT: 122.97
S 1: 119.10
S 2: 120.00
S 3: 115.00

USDSGD
R 3: 1.5680
R 2: 1.5411
R 1: 1.5304
CURRENT: 1.5230
S 1: 1.5099
S 2: 1.5000
S 3: 1.4921

Market Brief

The dollar seems to be breaking away from the risk aversion trade which has been the persistent theme in the marketplace. The EurUsd rose nearly 130 pips to the low range of 1.26, while the UsdJpy moved 50 pips to the downside trading at the mid 96 price area. The GbpUsd rallied over 300pips to the low 1.50 level, recovering some of last week’s losses. Equity markets opened lower in the US with the Dow down 1.2% or 100pts, the European stock indexes are negative as well with the DAX off 2.1% or 100pts in intraday trading. Bond yields are mostly flat with the short end of the curve marginally higher, there was a bit more selling in Eurobonds vs. US treasuries. Commodities were mostly flat with oil slightly higher at $57bbl, and gold fractionally lower at $735oz.

The Euro picked up momentum which has been atypical to recent price behavior relative to risk aversion. Trading in the FX markets has been highly correlated to trends in equities and commodities, which has displaced some of the fundamental economic drivers. If the risk aversion trade breaks, we are likely to see economic factors take precedent in currency trading. In the UK, home prices declined 2.9% vs. the prior reading of 1.0%. The mortgage markets have experienced substantial turbulence based on the lockup in available credit. In an attempt, to create liquidity the govt. is looking trying recapitalize through various lending facilities. The BoE is taking precaution against excessive borrowing, to prevent a selloff in the Sterling.

Empire manufacturing data came in at ‐25.34 vs. ‐26.00 exp, the reading is still exceptionally weak serving as evidence of a US recession. The dollar and the yen hold their posts as the designated safe haven currencies during the financial crisis. Even with negative GDP growth out of Japan, market perceives risks to be limited in the region in comparison to other major economies.

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Asian Session: G20 fails to impress as the dark hand of recession comes knocking on Japan’s door.

November 17, 2008 10:44 AM CET

G10 Advancers and Decliners vs USD

	CAD	-0.296
	GBP	-0.334
	NZD	-0.393
	JPY	-0.438
	CHF	-0.464
	DKK	-0.752
	EUR	-0.763
	AUD	-0.939
	SEK	-0.939
	NOK	-0.963

Global Indexes

Current Level

% Change

Nikkei 225 Index	8522.58	+ 0.71
Hang Seng Index	13487.69	- 0.40
Shanghai Index	2030.48	+ 2.22
FTSE futures	4207.5	- 0.57
DAX futures	4718	- 0.50
DJIA futures	8405	+ 0.41
Nasdaq futures	1162.5	+ 0.61

World Markets

Current Level

% Change

Gold	743.65	+ 0.21
Silver	9.66	+ 1.36
VIX	66.31	+ 10.83
Crude wti	56.06	- 1.74
USD Index	530.28	+ 1.18

Todays Calender

Estimates

Country / GMT

Euro Zone Trade Balance	-6.0Bn	-9.3Bn	EUR / 10:00
USD Empire Manufacturing	-27.0Bn	-24.6Bn	USD / 13:30

Currency Tech

Market Brief

This weekend’s G20 meeting in Washington failed to impress. While a variety of issues were discussed at the meeting, the general consensuses are that the leaders of the 20 largest economies would be left to their own devices and tailor a response to the current global economic woes. The lack of a concerted and unified effort or stimulus package – especially for smaller economies caught in the mix sent Asian markets lower this morning.

The news that Japan has officially entered a recession hit the news wires this morning as data showed the world’s second largest economy booking a contraction of 0.1% in Q3 – the second quarter in a row. This comes after the two largest Euro Zone members Germany and England announced their economies were in recession last week. While the Nikkei 225 initially fell on this news, investors seeking companies that would be shielded by the slowdown traded actively helping the index rebound from early losses. Nikkei is up 0.71%. China’s Shanghai Index rose 2.2% surfing on the wave of the recent $500Bn stimulus package – China’s substantial monetary reserves could come to the rescue of other larger economies.

On the Foreign Exchange front the EURUSD and USDJPY traded in defined ranges this morning, 1.2512 – 1.2596 and 95.85 - 97.55 respectively. The Yen slowly declining in morning trading hours as the Nikkei rises. However, continued global deleveraging is most certainly going to keep the Yen stubbornly strong, risk aversion remains a major factor in the FX markets. Cable is exceptionally volatile but absolutely bullish this morning, still feeling the ripple effects of last week’s BoE statements on recession. Broadly, Yen and USD continue to rise as investor pull funds out of from emerging markets and riskier assets.

Commodities – Gold rose slightly this morning, up $7 to $747, while crude continues to give way, slumping $1 to below $56/bbl – following Asian stock market slide this morning.

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