- Regional stockmarkets rise by up to 3% after 2.6% rise on Wall Street
- Australian trade balance +134 million, first positive in years after improved contract prices for commodities kicked in
- BoE’s Posen again refers to unsustainable state of public debt in Japan, UK, US and Europe
- Xstrata suspends Australian investment in protest at new mining tax
- 4 candidates vying to be new Japanese PM
- Nikkei rises by over 3% on Wall Street lead, change of leader and weakening JPY
A very positive session on Wall Street set the tone for Asia and whilst the moves haven’t been huge, all of the JPY crosses have made new short term highs. Corporate offers in USD/JPY above 92.50 have dissuaded any rash bullish momentum.
EUR/JPY opened around 113.00, dipped early in the session but immediately rallied once Tokyo opened and stockmarekts started to rise. Hedge fund short covering was noted after the break above 113.15 but the presence of corporate offers in USD/JPY and heavy selling in EUR/USD above 1.2300 helped soak up the buying. Range: 112.70/113.57.
EUR/USD was used only as a function of the EUR/JPY cross although EUR/GBP short covering was also noted. Ranges: EUR/USD 1.2228/1.2307; EUR/GBP .8348/78.
AUD/USD has been well supported all day as medium term shorts exit the market particularly in AUD/JPY. The surprisingly strong trade data encouraged further short covering. Ranges: AUD/USD .8405/83; AUD/JPY 77.50/78.22.
Cable has been quiet in a 1.4638/93 range and did not react to news that the PRU/AIA deal was officially dead (as this was probably abundantly clear last night).
Markets: Nikkei +3%; HK +2%; Sydney +2.2%; Seoul +1.5%. Gold steady at $1224/oz.
