Archived IMT (2009.10.30)

Risk appetite and risk assets were given a big shot in the arm by not only the stronger than expected 3.5% increase in US Q3 GDP, but also by the robust 3.4% jump in consumer spending (highest quarterly rise since Q1 2007) after -0.9% in Q2. Regardless of whether such spending were propped by inventory restocking (strongest contribution to GDP since Q4 2005), cash-for-clunker and 1st time home buyer credits, markets saw had an ideal set-up to the drive the risk trade at the expense of the USD and JPY. $1.47 in EURUSD and 1,045-47 in S&P500 barely held up (but successfully) on Wednesday before being fired up post-GDP. A Friday close above these levels constitutes a WEEKLY and MONTHLY close, requiring a revisit above 1,080 and 1.49 into subsequent week for the rebound to hold up. GBPUSD recovery faces the next test at the right shoulder & 76.4% retracement at 1.6720, coinciding with the left shoulder on June 30th. USDJPY capped at 91.70, EURJPY eyes 136.30 resistance. Watch out for CHINESE Oct business sentiment survey 1:35 am GMT and PMIs.