Market Update - 24 October 2012

• Stock market got hit as the earnings season continue to disappoint the market. Markets were basically washed out last night with risk off as US Equities market took a hit, the Dow is down 1.82% to 13,102.53 while the S&P is down 1.44% to 1,411.13.

• USDMYR as expected with the risk off opened higher at 3.0600 and we expect some volatility today as we are expecting the Australia CPI numbers as well as the important China PMI Flash.

• Treasuries rose as concern the U.S economic recovery is faltering drove record demand from a group of investors that includes pension funds and insurance companies at the government’s auction of $35 billion of two-year notes.

• Spain’s 10-year yield rose 13 basis points, or 0.13 percentage point, to 5.62 percent at 5 p.m. in London after gaining as much as 15 basis points, the most since Oct. 15.

• Crude fell 2.4% to 86.52 and through important support and Gold fell 1% to 1707 and copper fell 1.4%. Gold is again behaving more like a risky asset than a sage heaven as the allure of it being a hedge for downside and inflation continues to diminish.

• G-7 currencies were weaker across the board. BoC caught the market off guard with a hawkish tone - especially given Flaherty's comments last week.

• Euro and GBP both heavily hit with BOE's King leaving the door open to further QE. USDCAD gapped lower from .9970 to .9915 following the BoC comments that higher rates will become appropriate.
• Later today all eye on the Aus CPI numbers. Q3 CPI is expected at 1.0% versus a prior reading of .5%, as well as China flash PMI, should be a day with some volatility.