- Japanese PM Hatoyama resigns
- Australian Q1 GDP +0.5%
- Increasing talk of an agreement between Australian government and mining companies
- Threat of a criminal probe and possible corporate break-up saw BP drag Wall Street 1% lower late in session
- BP has been trying to reassure investors regarding future costs and this helped Asian stockmarkets rebound
- Regional markets +0.5% after being down over 1 % in early trade
The mood in early trade was quite bearish after Wall Street fell 1% in the last 30 minutes of trade. This mood saw the JPY crosses trading at their session lows very early on but resignation of the Japanese PM helped the JPY to weaken which in turn helped the Nikkei to rally from early losses.
USD/JPY opened around 91.00, fell briefly in early trade in line with the crosses but has bounced strongly since the PM’s resignation became known. Solid offers between 91.60/75 have slowed progress but there has been no dip of note. Ranges: 90.89/91.78; EUR/JPY 111.04/112.50
The EUR/USD has been fairly quiet compared to the others as its been buffeted by EUR/JPY buying and EUR/GBP selling. Market talk that China has a large 1.21/1.25 no-touch order in place has heightened the expectation that we are in for a week or so of choppy trading. Range: EUR/USD 1.2202/63
Sterling has again been a strong performer with EUR/GBP breaking below the overnight low and GBP/JPY rallying over 150 pips in one hourly period. Ranges: cable 1.4635/1.4739; EUR/GBP .8308/50; GBP/JPY 133.00/135.20
AUD/JPY fell to a low of 75.30 in the first 30 minutes after the NY close but speculation that the Australian government might reach a deal with mining companies helped the AUD to rally off its lows. This rally took on new impetus after the PM’s resignation saw serious short-covering in AUD/JPY. GDP data came in as expected but we still saw more short covering directly thereafter. Ranges: AUD/USD .8297/.8374; AUD/JPY 75.30/76.75
Markets: Nikkei +0.4%, HK +0.8%, Sydney +0.1%. Gold steady at $1225/oz.
