A broadbased short squeeze is our
best explanation for the rally in risk overnight. Add to that China's announcement yesterday of a
stimulus plan, to roughly double infrastructure and manufacturing spending, as
well as China's third consecutive improvement in manufacturing PMI figures.
Poor US private payrolls data were ignored, and the
S&P500 gained around 2.6% until NZ's open. S&P banks didn't follow
suit, down 7%, neither did credit spreads, as concerns regarding the financial
sector linger. Most other asset classes behaved as one would expect, WTI oil up
8%, copper up 6%, and gold down 1.5%. US 10 year treasuries weakened, up 12bp
in yield, and are vulnerable to a surprise from tonight's auction announcement.
NZD's rebound was only slightly less impressive than
AUD's, from yesterday's 0.4985 low to NY's 0.5075 high. The Fonterra milk
powder auction result, up 16%, is in line with the mild rebound noted in food
commodities this year.
AUD regained all its post-GDP losses and then some,
reaching 0.6513 in New
That's just over 2 cents in 24 hours - flagging the extent of short-AUD
positioning. A Terry McCrann article pointing to an economic storm on the
horizon had no obvious impact. The AUD/NZD cross climbed off its 1.2765 low to
GBP's rise from the 1.40 area to 1.4170 could be
partly attributed to an unusually strong PMI services report. USD did manage to
rally against one currency - JPY, reaching 99.50, shy of the 100 level
where large option strikes sit.
US February non-manufacturing ISM fell to 41.6 in
Feb after two months of
improvement. It remains firmly in contractionary territory, although it is
above last November's low. The breakdown showed a weakening in activity and
orders, consistent with other indicators suggesting the pace of economic
decline has re-accelerated in February after a brief hiatus in January. The
prices paid indicator rose to almost 50 as the price-depressing effect of last
year's sharp slide in gasoline prices came to an end.
US ADP Feb private payrolls showed job losses accelerating to -697k in
February, consistent with official non-farm payrolls around -670k.
US corporate layoff announcements
totalled 186k in Feb, fewer
than January's 242k but still 158% higher than the same month last year. There
is no direct correlation with payrolls as layoffs can be announced well ahead
of their taking place.
Dallas Fed President Fisher warned that the 2009 Q1 contraction could be
similar to Q4 2008.
Euroland February services PMI was
revised up by 0.3 pts to 39.2,
still well down on January and a cycle low for the series.
UK Feb services PMI stepped up to 43.2 from 42.5
in January, the third month
consecutive improvement. The low 40s reading still implies that services
activity is contracting, although not at Q4's rapid pace.
UK British Retail Consortium shop price index found a higher rate of inflation on the high
street in February, probably due to the weak pound and the fact that petrol
prices have stopped falling.
UK Nationwide consumer confidence index rose to 43 in February, although confidence
This rally since last yesterday afternoon is
corrective, against the larger picture downtrend. However, the speed of the
rise is impressive, and points to further cleanouts of short positions, so that
0.51 is likely. On the day, 0.50 to 0.51 is suggested, with 0.51 vulnerable.
Speizer, Senior Market Strategist, NZ, Ph: (04) 470 8266
contributions from Westpac Economics
β’ A changing
climate (4 March)
β’ NZ Weekly
Forex Outlook (2 March)
papers/publications are available on Online Research on Westpac
Daily Forex Market News Forex news reports can be found on the forex research
headlines page below. Here you will find real-time forex market news reports
provided by respected contributors of currency trading information. Daily forex
market news, weekly forex research and monthly forex news features can be found
Forex News Real-time forex market news reports and features providing
other currency trading information can be accessed by clicking on any of the
headlines below. At the top of the forex blog page you will find the latest
forex trading information. Scroll down the page if you are looking for less
recent currency trading information. Scroll to the bottom of fx blog headlines
and click on the link for past reports on forex. Currency world news reports
from previous years can be found on the left sidebar under "FX Archives."
Elevate Your Trading With The Amazing Trader!
The Amazing Trader includes:
Actionable trading levels delivered to YOUR charts in real-time.
POTENTIAL PRICE RISK: HIGH to Medium- Wed --14:15 GMT-- US- Industrial Production
POTENTIAL PRICE RISK: HIGH- Wed -- 15:00 GMT-- CA- Bank Of Canada Decision
John M. Bland, MBA co-founding Partner, Global-View.com
Max McKegg's Daily Forex Trading Forecasts
Veteran FX Trader, Max McKegg, forecasts all the Major currencies and the Australasians; providing Daily and Medium Term Trading forecasts to subscribers, who include large Banks the world over, as well as individual traders in more than 30 different countries.
looking for your first broker or do you need of a new one? There are
more critical things to consider than you might have thought.
We were trading long before there were online brokers. Global-View
has been directly involved with the industry since its infancy. We've
seen everything and are up-to-data with recent regulatory changes.
The Global-View Forex Forum is the hub for currency trading on the web. Founded in 1996, it was the original forex forum and is still the place where forex traders around the globe come 24/7 looking for currency trading ideas, breaking forex news, fx trading rumors, fx flows and more. This is where you can find a full suite of forex trading tools, including a complete fx database, forex chart points, live currency rates, and live fx charts. In addition, there is a forex brokers directory where you can compare forex brokers. There is also a forex brokers hotline where you can ask for help choosing a forex broker that meets your individual fx trading needs. Interact on the same venue to discuss forex trading.
The forex forum is where traders come to discuss the forex market. It is one of the few places where forex traders of all levels of experience, from novice to professionals, interact on the same venue to discuss forex trading. There is also the GVI Forex, which is a private subscription service where professional and experienced currency traders meet in a private forex forum. it is like a virtual forex trading room. This is open to forex traders of all levels of experience to view but only experienced currency tradingprofessionals can post.
Currency trading charts are updated daily using the forex trading ranges posted in the Global-View forex database. You will also find technical indicators on the fx trading charts, e.g. moving averages for currencies such as the EURUSD. This is another forex trading tool provided by Global-View.com.
The forex database can be used to access high, low, close daily forex ranges for key currency pairs, such as the EURUSD, USDJPY, USDCHF, GBPUSD, USDCAD, AUD, NZD and major crosses, including EURJPY, EURGBP, EURCHF, GBPJPY, GBPCHF and CHFJPY. Data for these currency trading pairs dating back to January 1, 1999 can be downloaded to an Excel spreadsheet.
Forex chart points are in a currency trading table that includes; latest fx tradinghigh-low-close range, Bollinger Bands, Fibonacci retracement levels, daily forex pivot points support and resistance levels, average daily forex range, MACD for the different currency trading pairs. You can look on the forex forum for updates when one of the fx trading tools is updated.
Global-View also offers a full fx trading chart gallery that includes fx pairs, such as the EURUSD, commodities, stocks and bonds. In a fx trading world where markets are integrated, the chart gallery is a valuable trading tool. Look for updates on the Forex Forum when the chart gallery is updated.
Global-View.com also offers a forex blog, where articles of interest for currency trading are posted throughout the day. The forex blog articles come from outside sources, including forex brokers research as well as from the professionals at Global-View.com. This forex blog includes the Daily Forex View, Market Chatter and technical forex blog updates. In additional to its real time forex forum, there are also Member Forums available for more in depth forex trading discussions.
WARNING: FOREIGN EXCHANGE TRADING AND INVESTMENT IN DERIVATIVES
CAN BE VERY SPECULATIVE AND MAY RESULT IN LOSSES AS WELL AS PROFITS. FOREIGN
EXCHANGE AND DERIVATIVES TRADING IS NOT SUITABLE FOR MANY MEMBERS OF THE
PUBLIC AND ONLY RISK CAPITAL SHOULD BE APPLIED. THE WEBSITE DOES NOT TAKE
INTO ACCOUNT SPECIAL INVESTMENT GOALS, THE FINANCIAL SITUATION OR SPECIFIC
REQUIREMENTS OF INDIVIDUAL USERS. YOU SHOULD CAREFULLY CONSIDER YOUR FINANCIAL
SITUATION AND CONSULT YOUR FINANCIAL ADVISORS AS TO THE SUITABILITY TO YOUR
SITUATION PRIOR TO MAKING ANY INVESTMENT OR ENTERING INTO ANY TRANSACTIONS.