Market Update - 5 March 2013

• USDMYR opened a touch lower at 3.1030 despite all the bad news earlier, this could be due to a late rally in US markets before the close. For those who are following the equity markets, a correction seems to be in the brewing. Market usually tend to be a little iffy once we reach the first corner of every year, April-June, like the old saying sell in May and go away….this further reinforce my view of USDMYR range trade in short term with bias on the upside.

• Over in the European session, things stared on the back foot after waking to negative headlines from Asia, the Shanghai Composite falling 3.65%, the biggest one day fall since November 2010 after the government proposed measures to curb property prices and the PMI figures hit 5 month lows.

• This story picked up by trade may help explain the rally since 4am in the Euro and US stocks:

• (EU) ECB officials said to refute press speculation that indicated the ECB has considered exiting the Troika due to concerns about central bank independence - financial press:

• An earlier German press story suggested that the ECB was considering separating itself from the Troika structure with the IMF and EU because of worries about political influence in both directions; ECB members are said to be concerned that the Troika may exhibit undue influence on central bank policy, and in turn that the ECB may have increased influence on European politics. The German press report, citing unnamed sources at ECB, said the topic has been coming up every few weeks at the ECB. - Source TradeTheNews.com

• US stocks are rallying again despite warning signs from elsewhere in the world and valuations which I think are definitely on the high side, and earnings projections that may well prove optimistic. Anyway, here we are, the S&P is higher by 0.3% and into my sell zone in the 1520’s:

• Treasuries had a good start with yields hitting 1.825% before selling off all afternoon and closing 3bps higher in yield at 1.87%.

• More bad news for the Brits with the construction PMI falling to 46.8 from 48.7, the lowest since 2009. GBPUSD tested 1.50 before rebounding strongly