Market Brief

Safe-haven demand continues to diminish on anecdotes of positive risk sentiment. Investors, who were harboring risk capital in assets like US treasuries, are gradually reallocating funds into higher-yielding investments. The phenomenon of bear market rallies over the course of deep recessions is quite common, and with the degree of volatility in financial markets price swings will be exacerbated. The dollar has undergone some deleveraging over the last couple of days, but our desk is not convinced the underlying fundamentals are in place to justify a “true” rally.

The Usd declined against most of the G10, with the Nzd, Sek, Aud, and Cad are leading the charge. This move should not serve as a surprise considering the rally in commodities, as these currencies hold a strong correlation to the demand for raw materials. Oil broke resistance of $50bbl settling at $51bbl in a consistent one way move to the upside. Gold reassumed its role as an inflationary hedge, as commodity prices rose signaling a weaker dollar. Comments from the Federal Reserve stating that most banks that were subject to the stress test currently hold sufficient capital and better than expected corporate earnings from Ford and AMEX lifted financial markets higher. The economic backdrop in the Eurozone and the UK remains weak, but in the near-term macro news events are the controlling influence behind price movements. The GbpUsd fell 55pips to the higher range of 1.46, while the EurUsd rose 94pips to the low 1.32 price area.

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G10 Advancers and Decliners vs USD

Global Indexes Current Level % Change

Nikkei 225 Index8,707.99- 1.57
Hang Seng Index15,258.85+ 0.29
Shanghai Index2,448.60- 0.63
FTSE 100 Index4,069.79+ 1.28
DAX Index4,598.30+ 1.32
SMI Index5,064.29+ 0.80
DJIA futures7,914.00- 0.01


World Markets Current Level % Change

Gold911.23- 0.02
Silver12.80+ 0.15
VIX37.15- 2.49
Crude wti49.87+ 0.50
USD Index84.85- 0.78


Todays Calender Estimates Previous Country / GMT

IFO business climate, index82.382.1EUR / 8.00
IFO current assessment, index Apr82.282.7EUR / 8.00
IFO business expectations, index Apr82.681.6EUR / 8.00
GDP - preliminary estimate, % q/q (y/y) Q1-1.5,-3.8-1.6,-2.0GBP / 8.30
Retail sales, % m/m (y/y) Mar-0.5-1.9,0.4)GBP / 8.30
Durable goods new orders, % m/m (y/y) Mar-1.4,-24.73.5,-23.8US / 12.30
New home sales, thous. saar Mar340337US / 14.00
Retail sales, % (y/y) Feb---4.6MXN / 19.30
IMF and World Bank Spring meeting----25th - 26th

Currency Tech

AUDUSD

R 3: 0.7355

R 2: 0.7329

R 1: 0.7250

CURRENT: 0.7186

S 1: 0.7030

S 2: 0.7000

S 3: 0.6955


EURJPY

R 3: 132.00

R 2: 131.45

R 1: 129.70

CURRENT: 128.76

S 1: 126.10

S 2: 125.45

S 3: 122.10


USDSGD

R 3: 1.5188

R 2: 1.5135

R 1: 1.5090

CURRENT: 1.4909

S 1: 1.4904

S 2: 1.4805

S 3: 1.4705