Economist and Hedge Fund Manager Shayne Heffernan takes a look at EUR/USD, AUD/USD, USD/JPY trading live from Asia

Europe Market Snapshot

Yesterday marked some heavy losses on indices all over the world as more bad data coming from several big U.S. companies was mixed with bad news from the bank of Spain saying the recession will worsen in the upcoming months. Also luxury brands got a beating with Mulberry Group’s share price tumbling almost 24% and Burberry Group PLC dropping 3.24% one could think that even the wealthy refer from spending unnecessarily. The EURUSD fell back below the 1.30 handle but managed to find support at 1.2950. If the raft of Eurozone PMI data will disappoint or no good news will come from Draghi’s speeches tomorrow we could see an even further decline below that level. The Dax and the Eurostoxx 50 both lost 2.1% the CAC 40 had to hand in 2.2% while the Dutch AEX dropped even more 2.35%.

EUR/USD has been ranging from its lows to 1.2940, where it trades at the moment of writing. The IFO survey for Germany found declining business climate (at 100), current assessment (107.3) and expectations (93.2) in October. The German sovereign sold 10-year bunds, with the average yield rising from 1.52% to 1.56%.

We expect 1.2738 and 1.2605, (38.2% and 50% retracements)

Asia Market Snapshot

In line with other markets Asia started the day with some big losses. China’s positive PMI data managed to lift indices from their initial lows but was unable to push them all in the green. Crude oil managed to recovered slightly during the Asian session after dropping more than 4% yesterday and is currently trading around the $87 level. Gold keeps trailing down with market sentiment as the 1700 level was nearly hit yesterday. The Hong Kong Hang Seng index managed to gain 0.15% after yesterday’s holiday, the Nikkei 225 index is back to where it opened while the S&P ASX 200 index had to give up 0.50%.

Yen

Today, the ranging market continues, with 79.75/80 holding the pair against further decline. At the moment of writing, the chart is quoting at 79.80.

AUD

The market’s recent difficulty in pinpointing turning points in AUD/USD underlies this approach, with a variety of political and economic forces pulling on AUD/USD in very different directions. We target the 3-month AUD call USD put 25-delta risk reversal, arguing it is the most attractive vehicle.

US Market Snapshot

Earnings reports from several heavyweights in the DJ30 had investors on edge. Chemical maker Dupont dropped more than 9% after announcing quarterly profits fell below estimates and 1500 jobs will have to be cut. 3M co. drop 4.4% after announcing that the outlook for the future has deteriorated due to weak global growth. Apple unveiled its new iPad mini but did not manage to please investors. The shares dropped 3.26% as the device came in more expensive than expected. With a minimum price of $329 the device is roughly 50% more expensive than its competitors. The DJ30 fell 1.88% having its worst day since the 21st of June The S&P 500 had to hand in 1.44% falling below the September 1420 level while the Nasdaq gave up 0.88% breaching the 3000 handle not seen since the 6th of August.

Today’s Key Economic Releases
Currency Time (GMT) Event
EUR 08:00 German Ifo Business Climate Index
USD 14:00 New Home Sales
EUR 14:00 ECB President Draghi Speaks
CAD 14:30 BoC Monetary Policy Report
USD 18:15 Interest Rate Decision
NZD 20:00 Interest Rate Decision

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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