Todays forex Updates

Wednesday, September 10, 2008

• FX: EURUSD sustains below the 100 weekly SMA currently at 1.4208, but slowly starts to look soft with heavy bids around 1.4050. Carry trades well supported in Asia despite risk aversion in equities.

• Fixed Income: Bunds made a strong comeback yesterday, also supported by weak US home sales and flight to safety. Losing momentum in Asia though with JGB’s on debt issue speculation.

• Stocks: European session generally down 0.5-2.0%, looking to re-establish downturn trend. Ugly day in the US on Lehman worries. Indexes down 2-3.4%. Asia not taking that big a hit on bullish China numbers. Nikkei down 0.4%, Hang Seng 1.6%.

• Commodities: Metals lower with both gold & silver taking out key support levels, however, gold not managing a follow-through. Oil slightly higher in Asia.

• In a move that surprised the markets, OPEC has agreed to an output cut. The change would see the production effectively being curbed by half a million barrels a day. Before the decision, the oil prices had seen 5-month lows, or about 30% below the peak prices of this year. OPEC
had been expected to keep production levels unchanged but has instead taken on a more price defensive posture.

• In overnight trading, the Asian stocks have added to previous session’s losses as weak demand factors are now reinforced by sliding metals prices, hurting the large resource producers.

• As the stock price of Lehman Brothers continued to slide with no result from the talks it had held with Korea Development Bank, the firm has come under growing pressure to find a way out of its troubles. The markets will be keenly observing as the bank will be announcing its Q3 results before the US opening today, a week earlier than planned.


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