- Regional stockmarkets generally around 1% higher, following the US lead
- Bernanke reappointment and relatively good US housing data calm the market and promote risk sentiment
- Japanese trade data dampened enthusiasm in early trade
- On the other hand, South Korean consumer sentiment came in at a 7-year high
- Australian construction work data shows the benefit of the big stimulus spend
- Not everybody is totally enamoured with Ben Bernanke’s reappointment- the latest from AEP in the Telegraph
- Oil had a big fall overnight after touching $75/bbl it lost almost 5% and has traded steadily in Asia.
There was some quite heavy selling of USD/JPY and particularly GBP/JPY in very early trade despite the Nikkei opening over 0.5% higher. This is probably because, with today’s spot date of Friday, many saw it as the last opportunity to complete their hedging before the weekend election. There was also talk of stops in USD/JPY below 93.60 which might have attracted dealers attention. EUR/JPY fell to 134.10 again but solid demand there and CTA bids in USD/JPY helped steady the ship. The Shanghai exchange had initially opened lower and this, allied with the slightly disappointing Japanese trade data, kept the JPY crosses pressured. This pressure was released around lunchtime when the Shanghai bourse rallied into positive territory, leading to short covering in the JPY pairs.
EUR/USD and cable moved around in 30 pip ranges with the crosses although EUR/GBP has managed to eke out some small gains. The sentiment for the cross is universally bullish now it seems.
The AUD slipped to a 5 month low against the NZD but interest in both currencies was muted.
Markets: Nikkei +0.6%, HK +0.4%, Sydney +1%, Kospi +0.6%, Shanghai +1.5%. Gold up slightly to $948.50/oz.
Ranges: EUR/USD 1.4281/1.4306; cable 1.6306/50; USD/JPY 93.88/94.26; AUD/USD .8332/74; EUR/JPY 134.05/75
