MORNING BRIEFING: Risk aversion eases, Asia better on Australian and Japanese Data

What’s new:
Asia: Major equity indices mostly positive supported by Australian and Japanese data
Euro Zone Debt: Successful conclusion for Portugal and Poland’s bond auctions
Ireland: Anglo-Irish bank to be split in two
US FED: Beige Book on a softer tone for economy
Canada: BoC raises policy rate by 25bp


Today:



Rates in Asia and Indices:
EURUSD: 1.2742 - 1.2665.
USDCHF: 1.0153 - 1.0102.
GBPUSD: 1.5478- 1.5400.
EURJPY: 106.96 – 105.97.
USDJPY: 84.03 – 83.61.
DowJones: 10’387.01 +0.45%
NASDAQ:  2’228.87 +0.9%
S & P 500: 1’098.87 +0.64%
Nikkei: 9’098.39 +0.82%
Shanghai: 2'656.35 -1.44%
Gold: $ 1'256.80    
Crude Oil: $ 74.82

 
Comments:

In Asia, major equity indices  were mostly positive today as risk aversion slightly eased on the back of better than expected Australian employment change and a better than expected Unemployment rate amongst others. Even from Japan a BSI confidence gauge of the manufacturing firms showed signs of improvement for this year’s 3rd quarter, even though there were concerns over 4th quarter due to the rising Yen.

Earlier in the Euro Zone successfully concluded bond auctions from Portugal and Poland also eased concerns over debt worries. In addition the decision over Anglo-irish bank removed some of the uncertainty over the Irish banking sector. The nationalized lender will be split in two and its loan book will be wound down, loans will be moved to an asset recovery bank while the deposits will be put in a government-backed deposit bank.

The Fed’s beige book reported a softer tone on the economy and officials noted ‘widespread signs of deceleration’ although they also noted signs of continuing growth.

The BoC raised the policy rate by 25bp, the comments regarding domestic and international growth that followed were still cautious on the back of uncertainty but probably were less negative than what many were expecting.

The EUR/USD traded in the range of 1.2665-1.2742 this morning the single currency initially preserving some support but than giving in to selling pressure later in the morning.

Throughout today, some events on the economic docket might provide more direction. The ECB publishes its monthly report at 10:00 CET, we have a BoE interest rate decision at 13:00 CET and we have US jobless claims figures at 14:30  CET.


Good day,


Rudolf Muscat
Trading desk

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