Market Update - 12 March 2013

• Again Europe struggling overnight while the US markets continues to perform well. This trend seems to be growing and the datas are substantiating this monthly. Markets have expressed their view in the EURUSD pair but the break of 1.3000 support was short lived.

• GDP data in Italy showed the country suffered its 6^th straight quarter of economic contraction, GDP falling 0.9% QoQ and declining at an annualized pace of 2.8%. Coupled Fitch downgrade on Friday and that cast a dark shadow over the region, the Eurostoxx fell 0.37% while Italian yield rose 4bps.

• USDMYR now trading around a new handle of 3.1000 with today’s range expected to be at 3.0000-3.2000, bias at the moment still upside but a question I am asking myself now is if the correction I am expecting comes, what is the currency markets will run to? Because now it seems risk on, USD strengthens, risk off, USD weakens temporarily….

• Looking at the bigger picture or economic problems faced by Europe, German data was positive, showing imports growing 3.3% MoM and exports growing 1.4%, both higher than forecasts; meanwhile French and the aforementioned Italian data was, well, awful Industrial Production fell 1.2% MoM for an annualized pace of -3.5%, manufacturing production is falling at a rate of 4.5%/year.

• In US the DOW pushed further into new highs territory and is 0.35% higher while the S&P is making fresh daily highs as I write, up 0.32%. Treasuries edged lower with yields rising 1.3bps to 2.056% while commodities struggled on the back of weaker numbers from China and Saudi Arabia announcing they would increase production, Brent crude fell 0.7% to $110.08, copper fell 0.32% while gold edged up 0.17%.