ACM - Asian Session Snap shot (02/07/09)

Asian Snap: China revives the reserve currency debate and pushes for more Forex diversification – NFP's and ECB rate decision loom.

Snap-Shot

02 July 2009 - 10:31 CEST
G10 Advancers and Decliners vs USD CAD -0.245 JPY -0.263 NOK -0.394 EUR -0.431 DKK -0.433 CHF -0.591 AUD -0.680 GBP -0.934 NZD -1.033 SEK -1.403 Global indexes Current level % Change Nikkei 225 Index 9876.15 - 0.64 Hang Seng Index 19178.05 - 1.09 Shanghai Index 3060.25 + 1.73 FTSE 100 Index 4291.32 - 1.14 DAX Index 4820.82 - 1.73 DJIA futures 8402 - 0.55 Nasdaq futures 1471.25 - 0.51 World markets Current level % Change Gold 937.78 - 0.32 Silver 13.71 - 0.33 VIX 26.22 - 0.49 Crude wti 69.12 - 0.27 USD Index 79.99 + 0.47 Todays calender Estimates Previous Country / GMT Euro Zone Unemployment rate 9.4% 9.2% EUR / 09:00 ECB Rate Decision 1.00% 1.00% EUR / 11:45 US Change in Non-Farm Payrolls -365K -345K USD / 12:30 US Unemployment Rate 9.6% 9.4% USD / 12:30	Currency Tech AUDUSD R 3: 0.8375 R 2: 0.8263 R 1: 0.8150 CURRENT: 0.8026 S 1: 0.8025 S 2: 0.7985 S 3: 0.7930 EURJPY R 3: 139.20 R 2: 138.33 R 1: 136.46 CURRENT: 136.34 S 1: 135.04 S 2: 134.35 S 3: 133.00 USDSGD R 3: 1.4800 R 2: 1.4748 R 1: 1.4649 CURRENT: 1.4490 S 1: 1.4454 S 2: 1.4385 S 3: 1.4334 Market Brief Vice foreign minister He Yafei said yesterday that he wasn't aware that China had asked the issue of a global reserve currency to be on the agenda for next week's G8 summit. This saw the dollar drop, sending the EURUSD to a high of 1.4201. Despite the consternation at the minister's misinformation his comments on the need for a more stable and potentially non-sovereign global reserve currency ignited debate on the matter – this isn't much of a surprise as China is the largest holder of foreign exchange reserves and U.S Treasuries. Focus today is on the NFP's (12:30 GMT) and ECB rate decisions (11:45 GMT). Currency markets have been quite jittery as dollar driven moves show an inherent "tug of war" between the risk adverse and the risk takers. ADP report came in at -473K yesterday while consensus was at -395K – Consensus for the NFP's is at -365K with some economists expecting as much as -425K. A weaker number would be bullish dollar as it would reaffirm the plight of the risk adverse. Riksbank cut it's rates this morning by 25bps – another sign that we haven't seen the end of this recession. The ECB is largely expected to keep it's rates at 1.00%.
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