Market Brief

FX markets did not do much in Asia trading, as traders were still shaking off a very bumpy week. Asian regional indexes were unable to follow Wall Street’s late day rally, putting pressure on risk appetite. The AUDUSD rallied to 0.8725, as news of a large Australia-China coal deal provided markets with a temporary risk-on tone. However, the pair rapidly ran into offers around 0.8740 and spent the rest of the session limping back to 0.8645. The EURUSD followed a similar pattern, charging up to 1.3720 before vague EZ-official statements, especially regarding the current sovereign crisis, pushed the pair down to 1.3635. No official communiqué was issued by the G7 from Canada this morning, just reinforcing the fact this group lacks relevance. There were reports that the general consensus was that the ministers supported October’s statement on FX, would be monitoring markets and would provide a coordinated response if necessary. There were also rumors that EU officials have reassured other G7 member that Greece’s problems could be solved internally and no IMF bailout would be needed.

Markets seem to be still digesting Friday’s mixed US labor data. The unemployment rate unexpectedly fell to 9.7% vs. 10.0% exp, while non-farm payrolls declined by -20k vs. 15k exp (December’s number was revised down to -150k from -85k). However, average weekly hours worked, a dependable indicator for new jobs, rose to 33.3 which gave equities a boost and temporarily lessened the pressure on the EUR. The lack of strong data out of the US will just amplify the credit worries in Europe, so we continue to play the USD from the long side.

G10 Advancers and Decliners vs USD
 Global Indexes Current Level % Change
Nikkei 225 Index9,951.82- 1.04
Hang Seng Index19,439.45- 1.14
Shanghai Index2,935.37- 0.13
FTSE futures5,025.50- 1.51
DAX futures5,457.00- 1.38
SMI Futures6,180.00- 2.30
S&P   future1,058.60- 0.11
 World Markets Current Level % Change
Gold1,068.24+ 0.18
Silver15.15- 0.13
VIX26.11+ 0.11
Crude wti71.54+ 0.49
USD Index80.49+ 0.06
 Todays Calender Estimates Previous Country / GMT
Retail sales, % y/y--0.6CHF / 08.15
Currency Tech
R 2: 0.8830
R 1: 0.8756
CURRENT: 0.8653
S 1: 0.8579
S 2: 0.8545

R 2: 1.0870
R 1: 1.0781
CURRENT: 1.0708
S 1: 1.0645
S 2: 1.0598

R 2: 123.94
R 1: 123.30
CURRENT: 121.90
S 1: 120.71
S 2: 119.08

R 2: 13.345
R 1: 13.253
CURRENT: 13.16
S 1: 13.101
S 2: 12.939