Market Brief

The Usd was range bound in the Asian Session. The EurUsd traded between1.3940-1.4060 and the USDJPY traded from a high of 98.30 to a low of 97.75. Asian regional indexes are flat following Wall Street's lower close. Crude prices continue to strengthen rising to a 7 month high of $72.16bll. Yesterday's US 10yr auction was not a smashing success but still managed bid-cover ratio and awards to indirect bidders to be respectable (although at 34.7% yesterday was higher than average). The media is still buzzing due to several major EM such as Russia, China and Brazil have expressed interest to diversify outside the the Usd. Hoever, currently we have seen no eveidence of this occuring or corresponding Usd selloff. The Fed's Beige Book failed to provide any real insight, mimicking the previous report, stating the US economy remained weak or deteriorated but showed signs of the slump moderating.” In New Zealand, the RBNZ held rates at 2.50%. It seems that the market was pricing in a cut as the Nzd rapidly rose to 0.6380 against the Usd. The RBNZ stated that recent improvement in domestic activity has balanced downside risks to the economy and the need to monitor past rate cuts. Today US retail sales with be significant since it will be the first real test to the theory that FX markets are shifting their reaction to positive US data. Currently, the trend is counter intuitive but recent behaviors suggest this might be changing back to pro US equals positive USD and negative EM and commodities.

G10 Advancers and Decliners vs USD

Global Indexes Current Level % Change
Nikkei 225 Index9,981.33- 0.10
Hang Seng Index18,737.77- 0.25
Shanghai Index2,797.32- 0.67
FTSE 100 Index4,419.55- 0.33
DAX Index5,059.77+ 0.17
SMI Index5,461.44+ 0.46
DJIA futures8,759.00+ 0.05

World Markets Current Level % Change
Gold953.15- 0.14
Silver15.15- 0.26
VIX28.46+ 0.67
Crude wti71.41+ 0.11
USD Index80.14- 0.23

Todays Calender Estimates Previous Country / GMT
ECB monthly bulletin published----EUR / 08.00
BoE Inflation Attitudes Survey, % 1yr ahead--2.1GBP / 08.30
Retail sales, % m/m (y/y)0.3 (-9.9)-0.4,-10.1USD / 12.30
Initial jobless claims, ‘000 (4wk mvg avg)--621 (631)USD / 12.30
Retail sales ex autos, % m/m (y/y)0.2 (-7.9)-0.5,-7.7USD / 12.30
Business inventories, % m/m (y/y)-1.0,-6.2-1.2,-4.9USD / 14.00
FRB of Atlanta President Lockhart (FOMC voter) spe----USD / 17.05
Retail sales % m/m0.2-0.4NZD / 21.45
Retail sales ex autos % m/m0.40.5NZD / 21.45