Finexo Forex Headlines

Rally in risk hits a rough patch as uncertainty continues. But credit spreads are easing and must ease more for a continued renewal of risk appetite.

US September Retail Sales on tap - the credit crisis began hitting with full force in mid-September - any USD implications?

LATEST HEADLINES

US ABC Weekly Consumer Confidence out at -48 vs. -44 expected and -43 the previous week

• Australia Aug. Westpac Leading Index fell -0.1%.
  
  
• Japan Aug. Adjusted Current Account Total out at ¥903.2B vs. ¥1156B expected.
  
  
• Japan Sep. Tokyo Condominium Sales fell -53.3% YoY vs. -38.8% in Aug.
  
  
• Risk appetite clearly got ahead of itself yesterday after historic 2-day equity rally (as much as 25% in S&P500 from Friday bottom to Tuesday top!).
  
  
• Most markets in Asia fell on the day, though the Nikkei managed to eke out a 1% gain
  
  
• It is important for the various credit spreads to come in further for a renewed rally in risk. The US 3-month Libor vs. T-bill spread dropped 11-12 bps, but still above a week ago. 2 yr. dollar swap spreads fell sharply yesterday as bond market reopened in the US.
  
  
• Theme shift: we will now have a renewed focus on the main street economy if worst part of financial crisis now behind us: US Retail Sales for September up today the first key indicator. Could be worse than expected Norges Bank looking to cut 50 bps today - as Scandies remain very weak.
  
  
• USD reaction to markets continues to be: the more risk appetite, the weaker and vice versa - same as JPY and CHF.
  
  
• Intel's revenue and earnings were solid yesterday - a positive sign in an otherwise ugly earnings landscape.
  
  
• In Canada, elections were held yesterday and it appears that the Conservative Harper will remain in power - though still with a minority government. No apparent FX implications so far.