Opening Levels as at 12.00am:-

EUR/USD 1.4721/24 USD/JPY 89.18/21 GBP/USD 1.6018/22 USD/CHF 1.0309/13 USD/CAD 1.0539/44

AUD/USD 0.9038/42 NZD/USD 0.7391/95 EUR/JPY 131.30/34 EUR/GBP 0.9189/93 GBP/JPY 142.90/00

Gold 1046.30/10 Oil 71.20 Dollar Index 76.415 (+0.285)

Economic Data

German Data

  • Sept Trade surplus Euro 10.6 Billion from Euro 12.5 Billion in August, expectations Euro 12.6 Billion
  • Imports in August +1.1 % m/m from +0.1 % in August slightly better than expectations of +0.9 %
  • Exports in August -1.8 % m/m from +1.7 % (revised from +2.2 %) in July worse than expectations of +1.7 %
  • Sept. final CPI -0.4 % m/m from +0.2 % -0.3 % y/y from 0.0 % as per expectations.
  • Sept. final HICP -0.5 % m/m from +0.3 % -0.5 % t/t from -0.1 % slightly worse than expectations.

French Data

  • French Industrial Production in August +1.8 % m/m from +0.3 % (revised from +0.1 %) better than market expectations of +0.5 %

Italian Data

  • Italian Industrial Output in August +7.0 % m/m the biggest rise since 1990. This way exceeded market expectations of +0.6 % July was revised from +1.0 % to +2.4 % m/m. Annually -18.3 % from -17.9 % (revised from-18.2 %) expectations were –17.7 % y/y..

UK Data

  • Merchandise Trade balance in Aug. – 6.24 billion Stg. from -6.431 billion (revised from -6.48 billion) market expectations -6.3 billion.
  • PPI Output prices for Sept. +0.5 % m/m from +0.3 % (revised from +0.2 %) expectations +0.1 %, +0.4 % y/y from -0.3 % (revised from -0.4 %) expectations -0.1 %
  • PPI Input prices for Sept. -0.5 % m/m from +2.0 % (revised from +2.2 %) expectations -0.8 %, -6.5 % y/y from -7.7 % (revised from -7.5 %) expectations -6.7 %.

Canadian Data

  • Unemployment rate in Sept. fell to 8.4 % from 8.7 %
  • The number of people added to the workforce in Sept. was 31,600 (+91,600 full-time -30,000 part-time) from 27,100 the previous month versus expectations of 5,000

Comments/News

  • China’s Vice President Xi Jinping says that China and the EU should strengthen their dialogue on macro-economy and financial issues and they should both oppose protectionism. He reiterates that the economic recovery will be a long process and that the economic situation in China is stabilizing.
  • IEA (International Energy Agency) raises Q4 2009 world oil demand forecast by 530,000 bpd (barrels per day) to 85.2 million bpd and raises Q4 OPEC oil demand estimate by 500,000 bpd. It also lifts its 2010 global oil demand forecast to 1.42 million bpd, up 150,000 bpd from its previous forecast, raising forecasts for the 3rd consecutive month. Oil traded down to 71.35 has now recovered and trades at 71.44.
  • US President Barack Obama wins the Nobel Peace Prize.
  • FINMA (The Swiss Financial Market Supervisory Authority) says it will tighten Swiss banking regulations if international rules turn out stricter FINMA’S Chairman adds that if international rules turn out to be weaker Swiss regulations will not be softened. He says the regulator gas political support but he believes opposition may increase from market movers. Dollar against the Swiss trading lower at 1.0295
  • Ben Bernanke’s speech in Washington has been the main story for the market all morning. The speech was made last night during the Asian trading time zone and resulted in a reversal of the lower dollar trend. Some traders used it as an excuse to take profit on their short positions. Bernanke said that he was prepared to implement exit strategies and tighten monetary policy but now is not the time as he does not see sufficient evidence yet in the economic recovery for them to be implemented. He gave no indication on timing or the pace of the exit strategy but it will be when the time is right and when he sees stronger evidence of the economic recovery.
  • Jean-Claude Trichet saying the economy shows signs of stabilization. The recovery ahead will be very gradual and could still involve substantial risks. He adds that constant monitoring of the financial system resilience should be part of the new regime. He concludes “Thrifty, prudent housekeeping is Europe’s main safeguard against the risk of a bubble economy”.

Currencies

A very quiet start to the session with currencies range bound until mid-morning when the dollar reversed its overnight moves and gave up its gains predominately against the Yen to a low of 88.78. The Japanese Yen also strengthening against the Euro and Sterling causing a low in cable of 1.5932 and a high in the Euro of 1.4745. Late in the session dollar Canada in expectation of good employment data fell from 1.0540 area to around 1.0500 the on the release of the better than expected data fell to 1.0453.

Ranges

  • EUR / USD 1.4710 / 1.4745
  • USD / JPY 88.64 / 89.40
  • GBP / USD 1.5932 / 1.6030
  • USD / CHF 1.0277 / 1.0320
  • USD / CAD 1.0423 / 1.0550
  • AUD / USD 0.9019 / 0.9082
  • NZD / USD 0.7346 / 0.7406
  • EUR / JPY 130.84 / 131.66
  • EUR / GBP 0.9182 / 0.9242
  • GBP / YEN 141.63 / 143.08
  • Gold 1043.70 / 1049.90

Rates as at 7.30 am:-

EUR/USD 1.4766/69 USD/JPY 88.65/68 GBP/USD 1.5998/02 USD/CHF 1.0281/85 USD/CAD 1.0428/32

AUD/USD 0.9078/82 NZD/USD 0.7402/08 EUR/JPY 130.90/94 EUR/GBP 0.9226/30 GBP/JPY 141.87/95

Gold 1049.70/50 OIL 71.39 Dollar Index 76.130 (0.00)

Stock Markets

  • Nikkei closed at 10,016-39 higher by 183-92 (+1.87 %)
  • Hang Seng closed at 21,499-44 higher by 6-54 (+0.03 %)
  • Kospi closed at 1,646-79 higher by 31-33 (+1.94 %)
  • Shanghai Composite Index closed at 2,911,715 higher by 132,289 (+4.76 %)
  • FTSE 100 at 5,150-05 LOWER BY 4-50 (-0.09 %)
  • CAC 40 at 3,797-76 lower by 9-05 (-0.24 %)
  • DAX 30 at 5,708-54 lower by 8-00 (-0.14 %)

Have a great weekend