International Trading

Market Brief

The JPY and USD gained versus most of their major peers before data this week forecast to show the US housing market slowed and German business confidence fell. AUDJPY slid to a month low as commodities and stocks slipped. EURJPY fell to 107.22, the weakest since November 2001, USDJPY weakened to 84.89, EURUSD dropped to as much as 1.2621, the weakest since July 13 and USDCAD climbed to as high as 1.0571, the highest level since July 20. Sales of existing US homes probably dropped 13% to 4.65 million annually while US new home sales probably stagnated at an annual pace of 330,000 due tomorrow. Nikkei 225 slid as much as 1.5% to 8,983.52, slipping below 9,000 for the first time since May 2009, The MSCI Asia Pacific Index lost 0.6% after the Reuters/Jefferies CRB Index fell 0.4% yesterday, declining for a fourth day.
The JPY neared the 15-year high of 84.73 it reached on Aug. 11 after reports said that Japanese Prime Minister Naoto Kan will today meet with business leaders to discuss the currency’s strength. Kan and Bank of Japan Governor Masaaki Shirakawa exchanged views on the economic situation and the foreign-exchange market in their telephone conference yesterday but were hesitant to intervene in markets to weaken the JPY. The BOJ will be pressured to act fast as stocks keep falling and the JPY continues to gain, as JPY has advanced 15% this year in the biggest gain among major counterparts.
The EURJPY dropped to the weakest in more than eight years and the EURUSD fell to a six-week low as concern the global economy is slowing boosted demand for safer assets and as IFO German business climate index probably dropped to 105.7 (prev. 106.2) according to the data due tomorrow. The GBPUSD slid to a four-week low after a report suggested the BOE policy maker Martin Weale said the UK faces a “real risk” of a second recession and that the central bank’s latest economic forecasts are “putting a significant chance on the economy contracting over a four-quarter period.” The BOE on Aug. 11 lowered its 2012 growth forecast to 3% from 3.6%, citing “tight credit conditions” and the government’s planned budget reductions while facing the deepest spending cuts since WWII. The GBPUSD declined to 1.5427 while GBPJPY weakened to 130.95.
The AUDJPY and NZDJPY dropped toward the lowest in more than a month as concern that global growth is slowing damped investor appetite for higher-yielding assets. NZDUSD dropped for a third time in four days after a report showed inflation expectations were reduced. Inflation in New Zealand will average 2.56% in two year’s time lower than earlier forecast of 2.8%. AUDUSD declined as commodities prices fell to near a one-month low yesterday and oil slid today for a fifth day. AUDJPY fell 0.8% to 75.27 while AUDUSD dropped 0.5% to 0.8867 and NZDJPY weakened 0.8% to 59.68 while NZDUSD slipped 0.5% to 70.29.

Global Indexes	Current Level	% Change
Nikkei 225 Index	8996.15	- 1.32
Hang Seng Index	20884.43	- 0.02
Shanghai Index	2654.83	+ 0.59
FTSE futures	5220.50	+ 0.51
DAX futures	6006.50	- 0.08
DJIA futures	10130.00	- 0.27
S&P future	1062.90	- 0.25

World Markets	Current Level	% Change
Gold	1221.13	- 0.41
Silver	17.92	- 0.39
Crude wti	72.79	- 0.42
VIX	25.66	+ 0.67
USD Index	83.33	+ 0.25

Todays Calender	Estimates	Previous	Country / GMT
GE GDP (QoQ)/(YoY)	2.2%/3.7%	2.2%/1.6%	EUR/0600
GE Imports	7.5%	6.1%	EUR/0600
GE Exports	7.9%	2.6%	EUR/0600
Retail Sales (MoM)	0.4%	-0.2%	CAD/1230
Retail Sales less Autos (MoM)	0.1%	-0.1%	CAD/1230
Existing Home Sales	-13.4%	-5.1%	USD/1400
Richmond Fed Manf. Index	8	16	USD/1400

Currency Tech

EURUSD
R 2: 1.3000
R 1: 1.2880
CURRENT: 1.2640
S 1: 1.2500
S 2: 1.2330
USDJPY
R 2: 87.10
R 1: 86.20
CURRENT: 84.95
S 1: 84.50
S 2: 83.80
GBPUSD
R 2: 1.5750
R 1: 1.5560
CURRENT: 1.5420
S 1: 1.5350
S 2: 1.5225
AUDUSD
R 2: 0.9200
R 1: 0.9070
CURRENT: 0.8887
1: 0.8810
S 2: 0.8725

• S: Strong, M: Minor, T: Trendline, K: Keylevel, P: Pivot