Wednesday October 7, 2009 - 20:25:17 GMT
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Westpac Institutional Bank - www.westpac.co.nz
Forex Research - Morning Report
Morning Report Wednesday 8 October 2009
News and views
Equity markets in the northern hemisphere took a breather yesterday. The S&P500 is little changed at +0.2%, having barely moved throughout the session. Some media debate around the likelihood of an extension to the US first home buyers' tax credit scheme dented property and building firms, but otherwise there was little noteworthy news. Oil posted a decent loss of 2.5%, inventory-attributed, but metals were subdued, copper -0.5% and gold unchanged after initially making a fresh all-time high of $1048. US 10yr notes gained by 8bp, the 10yr auction well bid to 2bp lower than expectations. US money market fund assets dipped by $17.4 billion to $3.4 trillion last week, further evidence of money leaving the sidelines for riskier equity and credit assets.
The US dollar is holding above the key 75.83 for now - it dipped after Sydney closed to 76.13, but then bounced to around 76.50. EUR reversed the previous day's gains, down to 1.4650. USD/JPY was whippy, making a recent low at 88.00 before spiking to 89.40 and resting at 88.60.
AUD made a small push higher to a fresh 2009 high of 0.8951, but didn't hold that long, back to its Sydney close of 0.8890.
NZD reached 0.7398 and quickly sank back to 0.7320. AUD/NZD held previous gains between 1.2100 and 1.2150.
US consumer credit sank -$11.9 bln in August, below expectations of -$9.0 bln but above the previous month's -$18.9 bln.
Euroland GDP growth revised down from -0.1% to -0.2% in Q2, due to lower estimates for both household and investment spending.
German factory orders up 1.4% in Aug. That is the sixth consecutive monthly gain in orders, providing further confirmation that the global trade slump in Q4 last year and Q1 this year has now given way to a resumption of activity.
UK consumer confidence rises from 65 to 71 in Sep, according to Nationwide. This mirrors the rise in the GfK confidence index, reported last week. In other news, the British retail consortium reported a -0.1% yr fall in its Sep shop prices index (unchanged from Aug), a precursor to next week's official CPI data.
AUD/USD and NZD/USD outlook today: These currencies should be supported today by the 0.8850-70 and 0.7300-20 areas, respectively. Unless these supports give way, the upward trend is intact. The 0.7400-0.7500 target area for NZD should prove sticky. Today's main data event will be the Australian employment report, which we expect to show the unemployment rate nudging only slightly higher.
Westpac Banking Corporation ABN 33 007 457 141 incorporated in Australia (NZ division). Information current as at 14 November 2007. All customers please note that this information has been prepared without taking account of your objectives, financial situation or needs. Because of this you should, before acting on this information, consider its appropriateness, having regard to your objectives, financial situation or needs. Australian customers can obtain Westpac's financial services guide by calling +612 9284 8372, visiting www.westpac.com.au or visiting any Westpac Branch. The information may contain material provided directly by third parties, and while such material is published with permission, Westpac accepts no responsibility for the accuracy or completeness of any such material. Except where contrary to law, Westpac intends by this notice to exclude liability for the information. The information is subject to change without notice and Westpac is under no obligation to update the information or correct any inaccuracy which may become apparent at a later date. Westpac Banking Corporation is regulated for the conduct of investment business in the United Kingdom by the Financial Services Authority. Â© 2004 Westpac Banking Corporation. Past performance is not a reliable indicator of future performance. The forecasts given in this document are predictive in character. Whilst every effort has been taken to ensure that the assumptions on which the forecasts are based are reasonable, the forecasts may be affected by incorrect assumptions or by known or unknown risks and uncertainties. The ultimate outcomes may differ substantially from these forecasts.
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