The currency market saw quiet, range trading session on Monday, on US labor market holiday and light economic calendar, with USD being little sold especially against commodity currencies. Asian & European stocks rallied yesterday with Shanghai Composite Index rising 0.7% percent, supported by news from China's government to lift the amount foreign funds can invest in stocks. Gold prices ended Monday's session on a strong note penetrating the $1000oz barrier for the first time since late February.
The AUD sustained its Fridays rally against the USD, and closed above the key technical support level at 0.8517 (Oct 2009 High) supported by strong gold and rising stocks. Australia's NAB surveys for Aug showed strong gains in both business conditions and business confidence. The EURUSD traded in a very tight range on Monday with lows at 1.4301 and a high of 1.4359 with July German industrial orders coming at 3.5% above the 2% expected. The GBP dropped yesterday on news of a $16Bn takeover of Cadbury from Kraft. The British Retail Consortium released the retail sales earlier in the Asian session which showed a drop of 0.1% in values from Aug 2008, whereas sales increased 2.2%.
The Yen advanced today against most major currencies today as Asian equities dropped earlier in the Asian session and report showed the nation's current account surplus was less than estimated, trimming demand for higher yielding assets, and boosting demand for the Yen as a refuge. The current account surplus declined by 19.4% YoY. We are currently seeing a tight inverse relationship between stocks and the Yen.
On a side note, the UN's Conference on Trade and Development (UNCTAD) released a report calling for a reduction in the USD dependance for global trade.
Today we have no data releases from the US so expect the market to remain trading range bound. From the Euro Zone the German trade balance, current account, and Industrial Production for July will be released. From the U.K we'll be awaiting the release of the industrial and manufacturing production, and finally from Canada, the building permits.
|G10 Advancers and Decliners vs USD|
|Global Indexes||Current Level||% Change|
|Nikkei 225 Index||10,393.23||+ 0.70|
|Hang Seng Index||21,044.27||+ 2.01|
|Shanghai Index||2,930.48||+ 1.71|
|FTSE 100 Index||4,941.33||+ 0.16|
|DAX Index||5,467.50||+ 0.22|
|SMI Index||6,181.68||- 0.04|
|S&P future||1,022.70||+ 0.86|
|World Markets||Current Level||% Change|
|Crude wti||68.61||+ 0.86|
|USD Index||77.73||- 0.36|
|Todays Calender||Estimates||Previous||Country / GMT|
|Industrial production, % m/m (y/y) Jul||0.2, -10.1||0.5, -11.1||GBP / 08.30|
|Manufacturing output, % m/m (y/y) Jul||0.2, -11.1||0.4,-11.7||GBP / 08.30|
|Germany: Industrial production, % m/m (y/y) Jul||1.3||-0.1,-18.0||EUR / 10.00|
|Consumer credit, $ bn Jul||-3.8||-10.3||USD / 19.00|
|Nationwide consumer confidence, index Aug||--||60||GBP / 23.01|
R 2: 0.8815
R 1: 0.8695
S 1: 0.8380
S 2: 0.8240
R 2: 1.1125
R 1: 1.1100
S 1: 1.0720
S 2: 1.0630
R 2: 135.00
R 1: 134.15
S 1: 131.77
S 2: 131.05
R 2: 13.665
R 1: 13.575
S 1: 13.330
S 2: 13.130