Risk trade on as UK economy shows signs of improvement
City Index September 10, 2013 2:23 PM
<p>Risk trade has a bid tone so far this week as suddenly the world seems a better place. We hear from UK Chancellor Osborne that […]</p>
Risk trade has a bid tone so far this week as suddenly the world seems a better place. We hear from UK Chancellor Osborne that the UK economy has turned the corner, while a report in today’s FT indicates that President Obama would put planned air strikes on Syria on hold if the Assad regime follows the Russian proposal to hand over control of all its chemical weapons. The weaker US jobs report has also dampened taper expectations from the Fed this month as most analysts are now scaling back the size of the taper as I mentioned yesterday.
Overnight news has seen Chinese data continue to stabilise as industrial production came in at 10.4 year-on-year versus consensus expectation of 9.9% and the highest reading in 17 months as the domestic economy showed market expectations with retail sales coming in as expected at 12.8%. The stabilisation in Chinese data is giving the Australian economy a feel good factor as the NAB business confidence survey showed a strong rebound this month from -3 last month to +6.
JPY is opening weaker this morning as we flirt back on the 100 handle following comments from Japanese economic minister Amari that an economic package will be drawn up by month end as the market takes this as a sign that the much talked about sales tax implementation is upon us.
The data calendar is rather dull today but I will be looking towards Italy to dampen the risk positive environment as we await the Senate vote on whether Silvio Berlusconi can remain in Parliament following his recent tax fraud conviction. The current governing coalition is likely to collapse if he is ousted.
Supports 1.3220-1.3180-1.3105 | Resistance 1.3320-1.3350-1.3380
Supports 99.40-99.15-98.50 | Resistance 100.25-100.80-101.65
Supports 1.5675-1.5640-1.5600 | Resistance 1.5725-1.5750-1.5825
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