daily updates

Asian Session - Fed Adjustment

October 25, 2007 9:11 AM CEST

G10 Advancers and Decliners vs USD
NZD 0.67 
AUD 0.51 
CAD 0.34 
NOK 0.30 
SEK 0.26 
EUR 0.19 
DKK 0.19 
CHF 0.14 
GBP 0.05 
JPY -0.07 

Global Indexes Current Level % Change
Nikkei 225 Index 16,284.17 - 0.45
Hang Seng Index 29,383.86 + 0.17
Shanghai Index 5,649.97 - 3.30
FTSE futures 6,523.00 - 0.28
DAX futures 7,935.00 + 0.67
CAC futures 5,720.00 + 0.87
DJIA futures 13,696.00 - 0.07

World Markets Current Level % Change
Gold 763.97 + 0.94
Silver 13.64 + 0.48
VIX 22.01 + 2.08
Crude wti 87.94 + 0.96
USD Index 77.52 - 0.03

Todays Calender Estimates Previous Country / GMT
PPI (sep) mom 0.4% -0.4% SW / 7:30
IFO Business Climate ( oct) 103.7 104.2 GE / 8:00
Durable Goods Orders (sep) 1.5% -4.9 US / 12:30
Initial Jobless Claims 320k 337k US / 12:30
New Home Sales (sep) 770k 795k US / 14:00
Help Wanted Index 23 23 US/ 14:00


Currency Tech

AUDUSD
R 3: 0.9118
R 2: 0.9078
R 1: 0.9050
CURRENT: 0.9029
S 1: 0.8856
S 2: 0.8749
S 3: 0.8611

EURJPY
R 3: 166.10
R 2: 165.27
R 1: 163.97
CURRENT: 233.54
S 1: 160.48
S 2: 158.51
S 3: 156.33

USDSGD
R 3: 1.4758
R 2: 1.4698
R 1: 1.4676
CURRENT: 1.4585
S 1: 1.4577
S 2: 1.4530
S 3: 1.4500

Market Brief

The Usd stayed weak in Asian Session despite the markets best efforts to move things around. Usd was trading in a 1.4250-1.4275 range against the Eur and in a 113.88-114.25 range against the Jpy. A weak US equity session and a poor housing data spoiled the risk appetite rally and the consequent drop in yields were the sources of the slide of the Usd.

The greater then expected drop in US existing home sales, reaching a 9-year low in Sep., has cemented market expectations that the Fed will have to cut interest rates again next week.

Indeed, there is growing speculation in Fed Funds and yields that the Fed will need to deliver more than 25pb cut. This pressure on the Fed will increase if today’s durable goods orders and new home sales data are also weak. Those will be the key figures today. Currently we are wary of ruling anything out. However, we believe 25bp has the highest probability.

The RBNZ left rates unchanged this morning at 8.25%, with a neutral statement that listed a number of upside and downside risks to the economic and inflation outlook.