Market Brief

The Nikkei has once again led Asian equity gains as Japanese exporters were boosted by a weaker JPY. An article in the WSJ claimed that Japan's Tamaki (Vice Finance Minister for International Affairs) met with a representative of the Obama administration on Monday, and although officials have declined to comment on the details of the discussion, the article suggested the meeting may indicate a possible sign of coordinated FX intervention to come. USDJPY has since traded back up towards 88.00 and EURJPY is back above 132.50; levels which will likely appease Japanese officials for now and take away the immediate necessity to implement intervention. The JPY’s weakness against the USD is an anomaly amongst other major and EM currencies however; as the 4th straight day of equity gains has ensured risk appetite remains well charged. Gold has powered to new highs above $1226, EURUSD is back above 1.5100, and GBPUSD has broken above 1.6700.

      The only significant data release overnight – Australian Retail Sales (Oct) – came out exactly in line with forecasts at 0.3% MoM which has helped keep the AUD supported along with the increase in risk appetite. At the time of writing, AUDUSD is trading at the highs around 0.9320, however we believe that further gains will be contingent on European and US equities keeping the up the momentum of gains.

    Looking forward to today’s schedule, it will be a big morning for European data and policy; kicking off with Services and Composite PMI figures that (like the Manufacturing components released earlier in the week) are expected to post modest improvements on the month prior, followed by Eurozone Retail Sales for October and the latest revisions to Q3 GDP. In the Retail Sales numbers, the market is looking for a 0.2% MoM increase after September’s disappointing -0.7% print, whilst no changes are anticipated to the 0.4% advance GDP reading from mid-November. Moving into the early afternoon we are due to get the ECB interest rate announcement; and although there is no expectation for a change in the headline interest rate from 1%, there will be substantial focus on whether ECB members will announce the cessation of further 12-month fixed rate tenders. If they do decide to cease these stimulus operations, it will be viewed as an important first step towards an exit strategy – a development that would be seen as positive for the EUR.

G10 Advancers and Decliners vs USD

NZD

0.98

width=120

NOK

0.90

width=110.204081632653

SEK

0.86

width=105.30612244898

AUD

0.70

width=85.7142857142857

EUR

0.50

width=61.2244897959184

DKK

0.49

width=60

CHF

0.48

width=58.7755102040816

GBP

0.45

width=55.1020408163265

CAD

0.42

width=51.4285714285714

width=57.5510204081633

JPY

-0.47

 Global Indexes

 Current Level

 % Change

Nikkei 225 Index

9'977.67

+ 3.84

Hang Seng Index

22'547.96

+ 1.16

Shanghai Index

3'264.63

- 0.16

FTSE 100 Index

5'327.39

+ 0.29

DAX Index

5'781.68

+ 0.09

SMI Index

6'386.54

+ 0.23

S&P future

1'114.70

+ 0.61

 World Markets

 Current Level

 % Change

Gold

1'220.25

+ 0.37

Silver

19.31

+ 0.36

VIX

21.12

- 3.65

Crude wti

77.01

+ 0.54

USD Index

74.36

- 0.37

 Todays Calender

 Estimates

 Previous

 Country / GMT

Final Services PMI, index Nov

53.2

53.2

EUR/09:00

Final Composite PMI, index Nov

53.7

53.7

EUR/09:00

Services PMI, index Nov

57.0

56.9

GBP/09:30

Retail sales, % m/m (y/y) Oct

0.2 (-2.4)

-0.7(-3.6)

EUR/10:00

Preliminary GDP, % q/q Q3

0.4

0.4

EUR/10:00

ECB rate announcement, %

1.00

1.00

EUR/12:45

Nonfarm productivity, % q/q saar Q3 f

8.5

9.5

USD/13:30

Unit labour costs, % q/q saar Q3 f

-4.1

-5.2

USD/13:30

ISM non-manufacturing index Nov

51.5

50.6

USD/15:00

Currency Tech

AUDUSD
R 2: 0.9406
R 1: 0.9323
CURRENT: 0.9315
S 1: 0.9230
S 2: 0.9105

USDCAD
R 2: 1.0780
R 1: 1.0750
CURRENT: 1.0465
S 1: 1.0400
S 2: 1.0207

EURJPY
R 2: 134.00
R 1: 133.60
CURRENT: 132.75
S 1: 131.10
S 2: 130.50

USDMXN
R 2: 13.133
R 1: 13.089
CURRENT: 12.699
S 1: 12.404
S 2: 11.821