Market Update - 14 March 2013

• Italy tapped the mkts for the 1^st time since Fitch downgraded them. Markets were wary with yields. Luck of the Irish the Italians must be thinking...well its not luck I guess. They issued 5bln of new 10yrs at 4.15%. A massively positive result given expectations were to sell 4bln at 4.5%.

• A tale of two continents again, Europe not looking great while US continue to perform. Eurozone Industrial Production was disappointing -0.4% vs -0.1% expectation. This weighed on EU equities which closed in the red.

• The US meanwhile bounced on the Retail data, US Retail Sales produced a great result...+1.1% vs +0.5% exp. Even core sales which stripped out the large increase in petrol prices/sales trended higher. Eurostoxx -0.26%, MIB -1.74%, DAX +0.06%, S&P +0.13%.

• USDMYR still stuck at the range and supported at 3.1000. Today’s range im expecting 3.1000-3.1200 with low volumes given the lack of any meaningful data and we are inching closer to elections. I reckon market have more or less priced it in both in equities as well as the fx and fixed income space. Now its all sit and wait for the election results.

• *Down south in the land of kiwis, RBNZ OCR remains unchanged at 2.5% RBNZ'S WHEELER EXPECTS TO KEEP CASH RATE UNCHANGED IN 2013

• It’s of course key to keep in touch with EURUSD and USDJPY developments as they drive the markets nowadays. USDJPY pulled back below 96.00 with market still looking to buy on dips but I reckon they are more keen to buy at 94.80 – 93.80 levels. EURUSD also hovering around 1.3000 with no firm break lower, market is more cautious on this pair and watching Euro headlines to trade in the short term.