Economist Shayne Heffernan of takes a look at the days trading live from Asia.

Europe Market Snapshot

S&P surprised markets by moving to downgrade Spanish debt by one-notch to a rating just above “junk” bonds. The main risks cited included lack of growth and meeting budgetary targets but also political after 5 austerity packages have been announced within 1 year.

In other news, the proposed EADS-BAE merger is off the table after opposition from Germany.

This move highlights the growing problems with further integrating Europe and is a harbinger of problems to come with the proposed banking oversight rules for nations belonging to the common currency.

European equities continued to tumble yesterday, as the Swedish OMX fell -1.13% followed by a -1.00% drop in the Spanish IBEX. The Euro Stoxx 50 index declined -0.63% while EURUSD moved slightly lower to 1.2870 on the downgrade news, recovering from 1.2825.

Asia Market Snapshot

Markets are scurrying as the Spanish debt cut exacerbates the growth issues facing the global economy. In a more accommodative move, South Korea cut interest rates from 3.00% to 2.75%, the second such cut in 2012.

Meanwhile in China, passenger auto sales declined for the first time in 8-months as the RMB moved higher to its strongest level in 19-years against the dollar. Even though Australia added three times the amount of jobs expected, the gain was overshadowed by the rise in the unemployment rate from 5.3% to 5.4%.

Equity indices are mixed as the Hang Seng outperforms, rising 0.18% while meanwhile the Australian ASX is unchanged and the Nikkei has fallen -0.16%. AUDUSD is trading at its strongest level since the beginning of October, rising 0.43% to 1.0278.

The Japanese consumer confidence eased from 40.5 to 40.1 in September. The USD/JPY is down for the fourth day in a row and has fully retraced last week’s gains by coming down to 77.98.

AUD/JPY is currently near daily highs at 80.22 helped by surging AUD/USD which is printing fresh 6-day highs.

EUR?JPY renewed selling interests at 101.16 and the fall from 102.80 may extend marginal weakness below psychological support at 100.00, previous support at 99.65 should limit downside and further choppy trading would take place. Above 101.16 (yesterday’s high) would suggest low is possibly formed, bring a stronger rebound to resistance at 101.84, break there would signal the fall from 102.80 has ended and bring a stronger round to 102.20-30 first, however, said resistance at 102.80 should remain intact.

US Market Snapshot

A Federal Reserve Beige Book announcement yesterday highlighted that the U.S. economy while growing, is still facing serious headwinds to expansion. The comments showed that both consumer spending and unemployment continued to drag on the economy while more positive signs were witnessed in housing and manufacturing.

The key word in the report was “modest” versus “moderate” which was used earlier in the year to imply better growth prospects.

Good manufacturing data and auto sales continue to buoy the recovering economy. Equity indices closed lower across the board, as the Dow Jones slid -0.95%. The S&P 500 and Nasdaq were also weaker, dipping -0.62% and -0.43% respectively. Gold remains mostly unchanged at $1765.80 while WTI crude oil continues to tick higher, climbing 0.43% to $91.64 per barrel.

Today’s Key Economic Releases
Currency Time (GMT) Event
EUR 10:00 Greek Unemployment Rate
CAD 13:30 Trade Balance
USD 13:30 Trade Balance
USD 13:30 Initial Jobless Claims
USD 13:30 Continuing Jobless Claims
USD 19:00 Federal Budget Balance


Shayne Heffernan

Shayne Heffernan oversees the management of funds for institutions and high net worth individuals.

Shayne Heffernan holds a Ph.D. in Economics and brings with him over 25 years of trading experience in Asia and hands on experience in Venture Capital, he has been involved in several start ups that have seen market capitalization over $500m and 1 that reached a peak market cap of $15b. He has managed and overseen start ups in Mining, Shipping, Technology and Financial Services.Read the Terms of Service

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