Market Update - 8 March 2013

• Fears in Europe were eased by Mario Draghi overnight. He expects that Italian reforms would continue. He also said that a rate cut was discussed at the meeting and EURUSD flew up 140pips to 1.3130 after Draghi also left out the rising currency as an impediment to growth.

• On contrary with the risk on mode last night, US Equities was up and so was the US Dollar.

• Just to clarify, for those who have been reading the commentary and the usual risk off and Dollar is higher has changed in recent weeks as US economy recovers, market expects money to flow into US and resulting in more USD Strength. On top of that the USDJPY strength has also increased the USD strength as market feels more confident in betting on the pair given the risk on sentiment.

• USDJPY blew past the 94.20 resistance and hit an overnight high of 95.00. It is still hovering around that handle and market is awaiting tonight’s US NFP numbers. A good one would see the pair trade higher while a weak number would is it trade lower back to the 93.00 support.

• USDMYR is still hovering around 3.1050 and I don’t expect much movement today ahead of the US NFP tonight and also the weekend. Expect tight range trade of 3.0900 – 3.1100 with my opinion of still a biased on the upside.

• Equities were up across Europe, the Eurostoxx 50 up 0.4% while peripheral spreads narrowed after Portugal (-22bps) was upgraded to stable by S&P from negative, Spain successfully auctioned bonds (-11bps), and Draghi was upbeat on Italy (-6bps).

• The USA continued its recent run of better data, jobless claims falling to 340k and consumer credit expanding the most in 5 months.

• The DOW wandered furthered into the unknown, rising 0.2%, while the S&P rose 0.2%. Treasury yields rose 5.4bps to 1.99%.