Market Movers of the Day

Asia-Pacific

Japanese All industry activity down -0.6% MoM

Japanese Leading Economic index flat at 86.4

Japanese Coincident Index at 92.7

Europe

Swiss trade balance strong at 2.46B

UK M4 level rises by 11% YoY surprising for the better

UK Public sector borrowing at £11.4B

UK Retail Sales up by 0.4% lower than expected

Americas

Foreign investment in Canadian Securities up to $13.59B for September

Canadian investment in foreign securities up to $4.8B

Canadian Leading indicators up 0.7% MoM

US Leading Indicators up 0.3% MoM less than expected

US Intial Jobless Claims at 505K

Philadelphia Fed manufacturing survey up to 16.7

The Overall Sentiment

Forex

After a slight retreat the Dollar regained momentum once again as growth bets seem slightly ahead of economic data. Economic data in the US and Europe was rather positive with US initial Jobless claims holding steady at 500k and US leading indicators index rising 0.3% as lower rates supported growth. But nor the positive economic data nor the projection of 2010 growth by the Treasury Secretly was able to lift sentiment. The fears the US housing market will weigh on the US economy continued to loom and pushed the dollar higher in broad profit taking pullback. The Euro ended the day around 1.49$ and the Sterling closed the day around 1.665$ marking a strongly bearish.

Equities

Sentiment was rather negative with benchmark indexes on in the red with dominant profit taking almost across the board.  The global bearish sentiment was led by weakness in the resources sector with Alcoa falling close to -4% in the US and in the UK Rio Tinto was lower by -.3.8%.At the day’s end the Dow shed    -0.9%, the S&P was lower by -1.34% and the FTSE fell by -1.39%.

Commodities

Gold continued to perform well and although retreat slightly to 1140$ an ounce it later rebounded higher still close to its historical record at 1150$.Silver hovered slightly below the 19$.While precious Metals were supported by lower rates expectations Oil sank lower amid lower growth expectations settling around 77.5$ a barrel.

The Day Ahead

The opening event for markets will be the BoJ rate decision in Japan with investors largely expecting no change in key rates as economic conditions in Japan remain fragile. Investors will follow the BoJ rhetoric carefully and will be keen to figure wither the BoJ will go back into QE measures as deflation prissiest and keeps salaries and business under pressure. Any statement in that context could affect the Yen dramatically with Yen potentially encountering large bids. In Europe German PPI will reflect on inflationary pressures in the EU nevertheless the broad sentiment in Europe and the US is expected to be lead by Equities and the Dollar. A high dollar has the potential to pull markets back into red territory once again.

Bullish Scenario- A close above 0.9120 would signal the pair has broken the bearish channel and is ready to resume the major bullish trend.

Target A-0.935

Target B-0.947

Bearish scenario- A break of the 0.88 zone would lead to retest lower support levels

Target A-0.87

Target B-0.845

Support/Resistance

Daily Events

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