1) Overnight Asia Wrap
Risk off as all of the news over the weekend was negative. “Greece to Miss Deficit Targets Despite Austerity”, “Banking Crisis Set to Trigger New Credit Crunch” just to name a few. News out of Belgium that Dexia became the latest bank to seek bail out funds. The few equity markets that were open in Asia (holiday in Australia, China and Korea) were smashed. Hang Seng down 4.2%, Nikkei down 2.3%by 11:00 am. EUR and AUD drifted lower in our morning on light flows and reduced liquidity due to the holidays. CrossJPY selling out of Japan in addition to the rally in USDAsia weighed on risk.
AUD finally takes out stops through .9600 (.9592 current low) and EUR appears on the verge of taking out barriers at 1.3300. Hang Seng now off 5% with US Futures down .75%. Every rally has been short lived as the market consolidates before taking the next step lower in European trading hours.
Articles:
“Greece to Miss Deficit Targets Despite Austerity”
http://www.cnbc.com/id/44747592
“Second Belgian Bank Gets Bail-out”
http://news.bbc.co.uk/2/hi/7643638.stm
2) Orderbook & Flow
EURUSD buyers ahead of 1.3300, but below that …a definate skew of SELLING pressure as a result of options …every 25 pips to 1.3200.
USDSGD is skewed heavily towards bids below with little to the topside.
USDJPY topside offers 77.30-60.
We were buyers of USD vs Asia, especially SGD and MYR and net sellers of EURUSD overnight….macro flow
3) USD/Asia Run
USDKRW 1201.5 (Friday London Open 1177.5)
USDINR 49.72 (49.33)
USDPHP 44.18 (43.91)
USDCNY1y 6.4350 (6.4380)
USDIDR 9380 (9195)
USDMYR 3.2165 (3.1955)
USDTWD 30.65 (30.55)
USDSGD 1.3105 (1.2975)
4) Opening Levels
EUR 1.3339
GBP 1.5515
JPY 77.06
CHF 0.9105
WTI 78.1
Brent 101.8
XAU 1634.4
Silver 30.70
X-Over 743
Portugal 1110
Ireland 700
Spain 382
Italy 470
UK 10y 2.26
Ger 10y 1.85
US 10y 1.90
Bund 136.49
Spain over bunds 325
Italy over bunds 367
BeBanks Index 73.69
3m Eur Xccy -105.5
HSBC Global Research