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US Session: Equities Finish Strong ahead of a Quiet Week Ahead
November 21, 2008 11:52 PM CET
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G10 Advancers and Decliners vs USD |
| | Jpy | 2.32 |  | | | Gbp | 1.34 | | | | Eur | 1.08 | | | | Sek | 0.43 | |  | Chf | -0.07 | | | Nok | -0.58 | | | Dkk | -1.02 | | | Cad | -1.02 | | | Nzd | -2.66 | | | Aud | -3.35 | |
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Global Indexes |
Current Level |
% Change |
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| DJIA futures | 8,036.00 | + 7.33 | | S&P future | 792.00 | + 5.84 | | Nasdaq futures | 1,056.25 | + 1.61 | | FTSE futures | 3,779.50 | - 2.20 | | CAC futures | 2,943.50 | - 1.33 | | DAX futures | 4,089.00 | - 3.52 | | SMI Futures | 5,148.00 | - 3.32 |
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World Markets |
Current Level |
% Change |
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| Crude wti | 50.49 | + 2.17 | | Gold | 800.40 | + 7.43 | | Silver | 9.67 | + 7.83 | | USD Index | 88.19 | + 0.25 | | VIX | 72.67 | - 10.13 |
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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: 0.6696
R 2: 0.6596
R 1: 0.6416
CURRENT: 0.6238
S 1: 0.6077
S 2: 0.6009
S 3: 0.5875
EURJPY
R 3: 124.30
R 2: 121.17
R 1: 119.31
CURRENT: 119.27
S 1: 116.44
S 2: 115.00
S 3: 113.59
USDSGD
R 3: 1.5684
R 2: 1.5436
R 1: 1.5339
CURRENT. 1.5315
S 1: 1.5266
S 2: 1.5167
S 3: 1.5051
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Market Brief |
The dollar fell against the majors as financial markets rallied at the end of the day trading session. The EurUsd rose over 120 pips to high range of 1.25, while UsdJpy rose 22 pips approaching tje 96 level. The GbpUsd rose nearly 200 pips to the low 1.49 price area, in line with the recent trend of risk aversion. The equity markets rallied in the US up 6.5% or 494pts, and the SPX higher by 6.3% or 47pts. Commodities were slightly higher with oil at $50bbl, and gold up 7.4% to $800oz. Bond yields were mixed as the 10yr rose 3bps and 2yr wider 2bps to 1.09%. We are likely to see a quiet week ahead due to the holiday in the US and light economic data.
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Asian Session - Slight Rally in Risky Assets
November 21, 2008 10:02 AM CET
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G10 Advancers and Decliners vs USD |
| | JPY | 0.78 | | | | NOK | 0.32 | | | | GBP | 0.28 | | | | AUD | 0.14 | | | CAD | -0.12 | | | SEK | -0.14 | | | EUR | -0.32 | | | DKK | -0.33 | | | NZD | -0.36 | | | CHF | -0.51 | |
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Global Indexes |
Current Level |
% Change |
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| Nikkei 225 Index | 7,910.79 | + 2.69 | | Hang Seng Index | 12,659.20 | + 2.93 | | Shanghai Index | 1,969.30 | - 0.72 | | FTSE 100 Index | 3,896.34 | + 0.55 | | CAC 40 Index | 3,008.02 | + 0.92 | | DAX Index | 4,250.13 | + 0.70 | | DJIA futures | 7,771.00 | + 3.79 |
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World Markets |
Current Level |
% Change |
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| Gold | 758.78 | + 1.84 | | Silver | 9.24 | + 2.99 | | VIX | 80.86 | + 8.88 | | Crude wti | 49.56 | + 0.28 | | USD Index | 87.84 | - 0.14 |
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Todays Calender |
Estimates |
Previous |
Country / GMT |
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| PMI Manufacturing (Nov Prov.) | 40.5 | 41.1 | EZ / 8.00 | | PMI Services (Nov Prov.) | 45.0 | 45.8 | EZ / 8.00 | | PMI Composite (Nov Prov.) | 42.8 | 43.6 | EZ / 8.00 | | ECB’s Gonzalez-Paramo on Economic Uncertainty | -- | -- | EZ / 10.30 | | ECB’s Trichet in Panel Disc. on Bretton Woods II | -- | -- | EZ / 12.00 | | CPI Core (Oct) y/y | 1.9 | 1.7 | CA /12.00 | | CPI (Oct) y/y | 3.1 | 3.4 | CA / 12.00 |
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Currency Tech |
AUDUSD
R 3: 0.6696
R 2: 0.6596
R 1: 0.6416
CURRENT: 0.6238
S 1: 0.6077
S 2: 0.6009
S 3: 0.5875
EURJPY
R 3: 124.30
R 2: 121.17
R 1: 119.31
CURRENT: 119.27
S 1: 116.44
S 2: 115.00
S 3: 113.59
USDSGD
R 3: 1.5684
R 2: 1.5436
R 1: 1.5339
CURRENT. 1.5315
S 1: 1.5266
S 2: 1.5167
S 3: 1.5051
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Market Brief |
The Usd was mixed in the Asian Session, as equities rallied and risk appetite increased. Markets are watching the potential divergence between Usd and stock markets. Yesterday, the S&P fell by more than 6%, while the EurUsd gained, just adding support to the divergence theory. For the last 4 months, the tight correlation has had significant effect on traders positioning and, should decoupling continue, it will leave markets without a perceived critical driver. In Asia, the EurUsd slid to 1.2424 before rallying back to 1.2546, while the UsdJpy collapsed to 93.57 and then climbed to 95.00. With the abrupt reversal in Jpy, carry trades were also revived with the AudJpy climbing from 56.88 to 59.79. The GbpJpy rose to 141.10. Asian regional indexes are broadly positive, with only Shanghai lower. European futures are point to a positive open. Crude prices continue to hover around the $50.0bll handle, as demand just hasn’t returned even at these attractive prices. Volatility is still a major player, with VIX trading at 80. Overall, it was another tough week for risky assets, with VIX rising above 70% again, credit spreads reaching new highs, stock indexes dropping to new lows and continued weakness in commodity prices. Given the pessimistic malaise now cover the financial markets we don’t anticipate any near term change in themes.
In Japan the BoJ held rates at 0.30%, which was widely expected despite confirmation this week that the economy has slid into a recession. The Bank core assessment in their Economic Assessment was the economy was still sluggish and recovery to take awhile. The statement from the BoJ’s November Monetary Policy Meeting held on to the wording "increasingly sluggish" growth as the economic assessment. Again, saying previous increases in energy and materials prices and decreasing export growth the culprit. Although the outlook still expects a gradual reduction to moderate growth, the BOJ again stated that "it will take some time for the necessary conditions for Japan ’s economic recovery to be satisfied….given the slowdown in overseas economies and turmoil in global financial markets".
The calendar today is on the light side, with no major events or data scheduled in the UK or US. ECB's President Trichet will contribute in a discussion on Bretton Woods II in Frankfurt , However, we don’t expect any comments on monetary policy or other market moving remarks. Euro-zone PMI surveys for November will probably indicate that output in the eurozone is continuing to contract in Q4.
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US Session: Equities Sink for Second Straight Session, Sterling Slides
November 21, 2008 12:27 AM CET
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G10 Advancers and Decliners vs USD |
| | Gbp | 0.31 | | | | Nzd | 0.29 | | | | Aud | 0.23 | | | | Nok | 0.12 | | | | Sek | 0.09 | | | | Chf | 0.04 | | | | Dkk | 0.02 | | | | Cad | 0.01 | | | | Eur | 0.01 | | | Jpy | -0.56 | |
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Global Indexes |
Current Level |
% Change |
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| DJIA futures | 7,546.00 | + 0.79 | | S&P future | 751.50 | + 0.43 | | Nasdaq futures | 1,045.50 | + 0.58 | | FTSE futures | 3,864.50 | - 3.47 | | CAC futures | 2,983.50 | - 3.38 | | DAX futures | 4,238.00 | - 2.66 | | SMI Futures | 5,325.00 | - 3.59 |
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World Markets |
Current Level |
% Change |
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| Crude wti | 49.42 | - 8.65 | | Gold | 745.95 | + 0.12 | | Silver | 8.98 | + 0.08 | | USD Index | 87.97 | + 0.75 | | VIX | 80.86 | + 8.89 |
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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: 0.6600
R 2: 0.6425
R 1: 0.6334
CURRENT: 0.6286
S 1: 0.6245
S 2: 0.6027
S 3: 0.6006
EURJPY
R 3: 128.44
R 2: 125.48
R 1:; 123.11
CURRENT: 119.64
S 1: 119.10
S 2: 117.66
S 3: 115.00
USDSGD
R 3: 1.5680
R 2: 1.5411
R 1: 1.5304
CURRENT: 1.5289
S 1: 1.5099
S 2: 1.5000
S 3: 1.4921
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Market Brief |
The dollar rallied in today’s trading session, as the risk aversion overtook the marketplace. The EurUsd fell 35 pips to the mid 1.24 range, while the UsdJpy dropped 200 pips to the high 93 price area. The GbpUsd declined 225 pips to the low 1.47 level, as Traders selloff high yielding assets. Equity markets tanked in the US with the Dow down an additional 5.5% or 444pts to 7552. European stock indexes were also negative with the SMI down 4% or 217pts, along with the FTSE, CAC, and DAX down more than 3% each. Bond yields collapsed as the 2yr yield decreased to its lowest level in history at .97%. The 10yr yield tightened by 31bps to 3%, and the 30yr retracted 42bps to 3.4%, both of which a strong representation of bearish sentiment among investors. Commodities were negative across the board, with oil down 10% to $48.70bbl, and gold off .1% at $745oz.
An EU fiscal stimulus package may be in the works, as policymakers look for alternative methods to stimulate growth. A German Economics Minister stated that the package would equate to 1% of GDP or 130 billion Euros. The plan would be implemented in combination with further easing in monetary policy, sparking further weakness in the currency as investors deleverage euro denominated assets. In the UK, retail sales came in better than expected down 0.1% vs. 0.9% est. The positive economic news had little effect on Sterling trading, as the FX markets move more in tandem with fluctuations in risk aversion versus fundamentals.
Jobless claims came in at 542k, its highest level in several years and worse than the projected reading of 505k. US economic conditions continue to worsen, and the level of fear among market participants is heightened by record volatility and substantial losses in equity markets. A serious degree of concern surrounds Citigroup as the stock price slid 50% in the last 5 days of trading. Being that Citigroup is one the US largest banks, their demise would add further instability to the battered financial markets. Dollar strength is amplified due to heavy buying in Treasuries, this trend is likely to wane when we move towards a recovery.
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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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