1

Time(GMT) Economic Release IMP Actual Forecast Prior

01:00

China Manufacturing PMI (SEP) Medium 49.8 50.1 49.2

07:30

Switzerland SVME-Purchasing Managers Index (SEP) Medium 47.5 46.7

07:55

German Purchasing Manager Index Manufacturing (SEP) Medium 47.3 47.3

08:00

Euro Zone Purchasing Manager Index Manufacturing (SEP) Medium 46 46

08:30

U.K Purchasing Manager Index Manufacturing (SEP) Medium 49.3 49.5

09:00

Euro-Zone Unemployment Rate (AUG) Medium 11.4% 11.3%

14:00

U.S ISM Manufacturing (SEP) High 50 49.6

14:00

U.S Construction Spending (MoM) (AUG) Medium 0.5% -0.9%

FOREX Newsletter October 01, 2012

Recent Interest Rates & US

Treasury Yields

USD 0.00~0.25%

EUR

0.75%

GBP

0.50%

JPY

0.10%

CAD

1.00%

AUD

3.50%

NZD

3.00%

2-yr Yield

Change

-0.02

Yield

0.23%

5-yr Yield

-0.02

0.62%

10-yr Yield

-0.02

1.63%

The U.S Dollar ended the week higher against nearly all of its major counterparts as

stocks and commodities look to close out an otherwise strong third quarter with a

loss. Investors were acutely focused on disappointing manufacturing numbers out of

the U.S on Friday, with Chicago PMI unexpectedly falling to 49.7 from 53.0. With a

reading below 50 denoting contraction, the number shrunk for the first time since

2009. Following Thursday’s weak reading of Q2 GDP, investors were fearful that

manufacturing will contribute less to economic growth than original hoped for.

Meanwhile, personal consumption came in below expectations at 0.1%, flat from last

month’s downwardly revised reading. Personal spending registered flat from the

previous reading at 0.5% and U. of Michigan confidence fell to 78.3 from 79.2. The

Euro reversed Thursday’s gains against the Dollar, falling back in line with the pair’s

200-day MA in the mid 1.28’s. Thursday saw a significant rally for the Euro after Spain

approved a preliminary draft of its 2013 budget, which included significant reforms

to wages, pensions and other benefits. The conditions are a significant step in the

right direction and a strong sign that Spain may soon seek a full sovereign bailout. In

Spain’s case, requesting EU/ECB aid would be a benefit for the common currency as

it would help eliminate much of the uncertainty that has been plaguing the nation’s

debt markets. However, with protests likely throughout the nation over the

weekend, the lack of popular support will make it difficult for PM Rajoy to capitulate

to international creditors further. The British Pound was mixed, falling against the

Dollar, but gaining against the Euro. British government bonds gained for the second

straight week as investors increase bets that the Euro Zone debt crisis is far from

over. An index of services also gained at the fastest pace in more than a year, adding

to evidence that the economy is growing again. However, the safety appeal of British

government assets continues to be overshadowed by the “safe-haven” U.S Dollar.

The Japanese Yen was lower despite the risk-off atmosphere as investors suspect the

BoJ may devalue the Yen. PM Noda announced that he will reshuffle his cabinet next

week and the Japanese jobless rate unexpectedly contracted both would-be positives

for the Yen.

Pulse of the Market • The U.S Dollar rallied on its technical basis and now there is a fundamental spark

• The Single Currency lost ground against all the majors, now for the critical support

• The British Pound in conclusion conveys strongest scamper in 8 years to a close up

• The Yen advanced as a carry unwind leverages its funding and safe haven status

Euro

The Single Currency traded lower on Friday. The results

of the Spanish Bank audit were roughly as forecast and

were a non event for the market. The Downgrade

rumors got the market selling for most of the U.S session

and closed at lows of the day. The outlook is mixed with

more downside possible as Spain deliberates asking for a

bailout and Greece remains ongoing issue. Overall, the

EUR/USD traded with a low of 1.2838 and a high of

1.2959 before closing the day around 1.2851 in the New

York session.

Yen

The Japanese Yen hit 77.50 Yen support before reversing

for most of the U.S trading session last Friday to close at

78 Yen. The outlook is for more losses as the U.S Dollar

weakness but we have seen the pace of downside has

been very slow. Key level for the pair is at 77.13 Yen.

Overall, the USD/JPY traded with a low of 77.43 and a

high of 78.10 before closing the day around 78.02 in the

U.S session.

British Pound

The British Pound hit day highs at 1.6260 during the

European trading session but was slammed lower in the

U.S session. The heavy Euro and risk off stocks were the

main catalyst for the Pound along with talk of month end

flows being were largely Pound negative. Looking ahead,

U.K September PMI forecast at 49. Overall, the GBP/USD

traded with a low of 1.6112 and a high of 1.6272 before

closing the day at 1.6141 in the New York session.

Canadian Dollar

The Canadian Dollar retreated against the U.S Dollar on

Friday after a bevy of North American data and as

attention turned from Spain's new budget to the next

tests for the Euro Zone. The currency tracked global

equity markets, which declined after initial optimism

about Madrid's debt-cutting plans gave way to anxiety

over its troubled banks and faltering global economic

growth. Overall, USD/CAD traded with a low of 0.9780

and a high of 0.9851 before closing the day at 0.9830 in

the New York session.

Australian Dollar

The Australian Dollar is following the stock markets and

the commodities so investors had a negative day on

Friday as US equities fell hard. The general China

slowdown fears are lurking in the background and make

it easy to sell on rallies. The RBA meet tomorrow and the

consensus is that they are going to cut interest rates by

0.25%. September Chinese PMI Manufacturing came at

49.8. Overall, AUD/USD traded with a low of 1.0365 and

a high of 1.0473 before closing the day at 1.0372 in the

New York session.

Euro-Yen

EUR/JPY is trading below 14 days moving average and

above 50, 100 days moving average. Fast stochastic is

giving a bearish tone and MACD is also issuing a bearish

stance. The Relative Strength Index is above 48 and lies

below the neutral zone. In general, the pair has gained

0.07%.

Sterling-Yen

Currently GBP/JPY is trading below 14 days moving

average and above 50, 100 days moving average. Fast

stochastic is issuing a bearish tone and MACD is also

indicating a bearish stance. The Relative Strength Index

is above 50 reading and lies above the neutral zone. On

the whole, the pair has lost 0.03%.

Aussie-Yen

Currently, the cross is trading below 14, 50 days moving

average and above 100 days moving average. Fast

stochastic is giving a bearish tone and MACD is also

indicating a bearish stance. The Relative Strength Index

is above 40 reading and lies below the neutral region. In

general, the pair has lost 0.12%.

Loonie-Yen

This cross is trading below 14 days moving average and

above 50, 100 days moving average. Fast stochastic is

indicating a bearish tone and MACD is also issuing a

bearish signal. The Relative Strength Index is above 43

and lies below the neutral region. On the whole, the pair

has gained 0.28%.

Euro-Sterling

This cross is currently trading below 14 days moving

average and above 50, 100 days moving average. Fast

stochastic is indicating a bearish tone and MACD is also

issuing a bearish signal. The Relative Strength Index is

above 47 reading and lies below the neutral region. On

the whole, the pair has gained 0.11%.

Appendix

FOREX Closing Prices for September 28, 2012

Currency Open High Low Close Net Chg

EUR/USD 1.2913 1.2959 1.2838 1.2851 -0.0061

USD/JPY 77.60 78.10 77.43 78.02 0.4300

GBP/USD 1.6231 1.6272 1.6112 1.6141 -0.0093

USD/CHF 0.9369 0.9414 0.9334 0.9403 0.0031

USD/CAD 0.9804 0.9851 0.9780 0.9830 0.0026

AUD/USD 1.0441 1.0473 1.0365 1.0372 -0.0073

EUR/JPY 100.22 100.66 99.91 100.26 0.0700

GBP/JPY 125.96 126.19 125.41 125.91 -0.0400

CHF/JPY 82.79 83.19 82.59 82.94 0.1600

CAD/JPY 79.14 79.46 78.98 79.35 0.2200

AUD/JPY 81.01 81.24 80.70 80.91 -0.1000

EUR/GBP 0.7954 0.7994 0.7947 0.7961 0.0009

D a i l y P i v o t P o i n t s

Trading Range

Contract S3 S2 S1 Pivot R1 R2 R3

EUR/USD 1.2685 1.2762 1.2806 1.2883 1.2927 1.3004 1.3048 USD/JPY 76.93 77.18 77.60 77.85 78.27 78.52 78.94 GBP/USD 1.5918 1.6015 1.6078 1.6175 1.6238 1.6335 1.6398 USD/CHF 0.9273 0.9304 0.9353 0.9384 0.9433 0.9464 0.9513 USD/CAD 0.9719 0.9749 0.9790 0.9820 0.9861 0.9891 0.9932

AUD/USD 1.0226 1.0295 1.0334 1.0403 1.0442 1.0511 1.0550 EUR/JPY 99.14 99.53 99.89 100.28 100.64 101.03 101.39 GBP/JPY 124.70 125.06 125.48 125.84 126.26 126.62 127.04 CHF/JPY 82.02 82.31 82.62 82.91 83.22 83.51 83.82 CAD/JPY 78.59 78.78 79.07 79.26 79.55 79.74 80.03 AUD/JPY 80.12 80.41 80.66 80.95 81.20 81.49 81.74 EUR/GBP 0.7894 0.7920 0.7941 0.7967 0.7988 0.8014 0.8035

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the giving of the same is not to be deemed as an offer or solicitation on our part with respect to the sale or purchase of any securities or

commodities. TOGAKU Securities, its officers and directors may in the normal course of business have positions, which may or may not agree

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