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| Action Insight Weekly Report | Markets Snapshot |
Dollar Index Heading to 70 on Strong Equities and GoldDollar dived sharply last week as risk appetite was boosted by solid US corporate earnings and surge in commodity prices, in particular precious metals. Dollar index broke through 2009 low of 74.19 and is heading towards historical low of 70.70 made in 2008. DOW closed at new 2011 high above 12500 level last week and is set to open higher this week. Gold extends recent rally and makes new record high at 1519.2 as the week starts. The rally in silver is even more impressive as it's now just shy of 50 level. Commodity currencies were strong with AUD/USD made another record high 1.0773 while USD/CAD also extended recent down trend. European majors were firm too but more noticeable strength was seen in the Swiss France where USD/CHF made another record low. One of the major points to note was the weakness in USD/JPY which is now opening up the possibility of revisiting below-80 level. the Japanese yen. Net dollar short totaled USD 24.9b, a level unseen since 2007. The current market sentiments are still favoring more upside in stocks, precious metals and more downside in the greenback. |    |
| Featured Technical Report | |
AUD/USD Weekly OutlookAUD/USD rose to new record high at 1.0773 last week before losing some upside momentum and retreated. A temporary top should be in place and intraday bias is neutral for some consolidations. Deeper retreat might be seen to 4 hours 55 EMA (now at 1.0603) but downside should be contained above 1.0388 support and bring rally resumption. Above 1.0773 will target 61.8% projection of 0.8315 to 1.0181 from 0.9704 at 1.0857 next. |
| Special Report |
World Inflation Outlook (I): United States, Eurozone, United Kingdom, JapanWorld inflation pressure has heightened, exacerbated by the rally in oil prices since tensions in the Middle East and North Africa, in recent months. Such pressure was first felt in emerging countries in mid- to late- 2009 as they recovered from the financial crisis more swiftly than their advanced counterparts. Agricultural costs were the first to exert price pressures, followed by energy costs. In China, headline CPI rose to a 32-month high of +5.4% y/y in March despite government tightening. It's likely that inflation will stay above +5% in 2Q11. India's inflation jumped to +8.98% y/y in the month as driven by higher fuel and manufactured product prices. Inflation pressure and expectations have also increased in developed countries as recent CPI data pointed upward. |
| Suggested Readings | |
The Week in Review and Preview |
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