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Risk appetite fades over speculation of weaker housing market in US
Market Brief
The JPY advanced against all 16 major counterparts before reports this week forecast to show US existing home sales fell and Japan’s export growth slowed in July. Australia’s currency weakened after the election failed to deliver a majority government for the first time in 70 years. The EURUSD traded near a five-week low ahead of European data that may show growth in the EU’s services and manufacturing industries fell to 56.3 (prev. 56.7). The EURJPY dropped to 108.50, USDJPY fell to 85.36 and EURUSD traded at 1.2711 after it reached 1.2664 on Friday, the lowest since July 13, AUDUSD slipped 0.3% to 0.8911 and AUDJPY dropped 0.6% to 76.08. Sales of US existing homes probably dropped 12.9% to 4.68 million annual pace, Japan’s exports probably advanced 21.8% (prev. 27.7%) slower than last month according to data to be released on Aug. 25. Gains in the JPY were sustained after reports said currency intervention wasn’t discussed between Prime Minister Naoto Kan and BOJ Governor Masaaki Shirakawa in their telephone conference today. The Nikkei 225 retreated 0.8% to 9,108.58, the lowest since November, MSCI Asia Pacific Index fell 0.1% while S&P 500 Index futures climbed 0.2%.
The EURGBP declined to a seven-week low after France’s government last week cut its forecast for economic growth next year as President Nicolas Sarkozy prepares for the biggest budget squeeze in at least two decades. France will probably grow 2% (prev. 2.5%) in 2011, slower than previous forecast. France has pledged to cut the budget deficit to 6% of the GDP next year and to 3% by 2013 from about 8% in 2010. Europe’s sovereign risks may re-emerge amid lingering concerns about its fiscal health, giving further strength to a case of a weak EUR. ECB council member Axel Weber said on Aug. 20 that the ECB should help banks through end-of-year liquidity tensions before deciding when to withdraw emergency lending measures triggering concern about Europe’s recovery.
| Global Indexes | Current Level | % Change |
| Nikkei 225 Index | 9116.69 | - 0.68 |
| Hang Seng Index | 20895.17 | - 0.41 |
| Shanghai Index | 2640.24 | - 0.08 |
| FTSE futures | 5194.00 | - 0.35 |
| DAX futures | 6015.00 | + 0.06 |
| DJIA futures | 10219.00 | + 0.17 |
| S&P future | 1072.70 | + 0.19 |
| World Markets | Current Level | % Change |
| Gold | 1229.85 | + 0.17 |
| Silver | 18.07 | + 0.37 |
| Crude wti | 74.05 | + 0.31 |
| VIX | 25.49 | - 3.59 |
| USD Index | 82.93 | - 0.16 |
| Todays Calender | Estimates | Previous | Country / GMT |
| GE PMI Manufacturing | 60.5 | 61.2 | EUR/0730 |
| GE PMI Services | 56.3 | 56.5 | EUR/0730 |
| EU PMI Composite | 56.3 | 56.7 | EUR/0800 |
| EU PMI Manufacturing | 56.1 | 56.7 | EUR/0800 |
| EU PMI Services | 55.4 | 55.8 | EUR/0800 |
| EU Consumer Confidence | -14 | -14 | EUR/1400 |
Currency Tech
EURUSD
R 2: 1.3250
R 1: 1.3000
CURRENT: 1.2725
S 1: 1.2680
S 2: 1.2540
USDJPY
R 2: 87.20
R 1: 86.80
CURRENT: 85.37
S 1: 85.00
S 2: 84.50
GBPUSD
R 2: 1.5925
R 1: 1.5750
CURRENT: 1.5608
S 1: 1.5525
S 2: 1.5350
AUDUSD
R 2: 0.9200
R 1: 0.9070
CURRENT: 0.8925
S 1: 0.8810
S 2: 0.8725
- S: Strong, M: Minor, T: Trendline, K: Keylevel, P: Pivot
Published on Mon, Aug 23 2010, 09:14 GMT