Tuesday February 9, 2010 - 19:39:39 GMT
Share This Story
Westpac Institutional Bank - www.westpac.co.nz
Forex Research - Morning Report
Morning Report Wednesday 10 February 2010
News and views
Risk sentiment improved late in the European session on speculation that financial assistance for Greece was a prospect. Comments from several sources supported the notion, Olli Rehn (an incoming EU commissioner) saying support for Greece would be discussed in coming days, and a senior German source said the Eurozone governments had decided in principle to help Greece, later confused by German government denials any decision had been made. Greek equities (Athex) rose 5.0%, forming a bullish outside-up day, Eurostoxx 50 futures are up 1.9%, and the S&P500 is 1.5% higher. Although overshadowed, there was bearish news in the mix, Standard & Poor's saying the Euro area credit rating risks were to the downside, Fitch saying the UK is one of the more vulnerable AAA nations, and Bank of America and Citibank outlooks revised to negative (S&P). Commodities rose, copper, silver, and oil all by over 2%. US treasuries gained 6-7bp in yield, and demand at the 3yr auction was subdued (2bp above earlier market, although foreign central bank buying picked up).
The US dollar was already correcting its recent gains when the Greek bailout rumours went into overdrive, pushing the index to just under 79.80. EUR broke higher to 1.3840, pulling back to 1.3780 an hour ago. The push higher was likely helped by record short-EUR futures positioning. USD/JPY ground a little higher to the 89.30-89.80 area on reduced safe-haven needs.
AUD commenced its rise during the domestic session, from a 0.8615 low, reaching 0.8800 an hour ago.
NZD bounced off 0.6820 and reached 0.6968, yesterday's tax reform package too light on content and detail to have market impact. AUD/NZD remained consolidative between 1.2620 and 1.2660.
US wholesale sales rose 0.8% in December. Another strong gain in durables (up 3%) and higher fuel prices were offset by a partial reversal of the jump in farm product prices in November. Sales have risen consistently for the last eight months. Meanwhile, inventories fell 0.8%, a pace of rundown that suggests the initial Q4 GDP estimate of 5.7% may be revised upward a touch.
US NFIB small business optimism rose from 88.0 to 89.3 in January. This survey has received more attention recently, as a guide to whether smaller firms are seeing any of the improvement reported by larger corporates (which are captured in the likes of the ISM surveys). The pickup in January still leaves the headline measure within the range that it has been stalled at since May.
UK data was soft, but probably affected by the extreme cold weather in January. The RICS housing monitor saw a net 20% of real estate agents report a drop in the number of interested buyers, though a net 32% reported a rise in prices. The BRC retail sales monitor found same-store sales volumes down 0.7% on a year ago, and total sales up 1.2%, the slowest pace of increase in 15 years. Raising the VAT rate back to 17.5% may have also weighed on spending.
AUD/USD and NZD/USD outlook today: The AUD's corrective bounce should be contained by 0.8700 and 0.8800, with upside risks from Greek talk. The NZD initially targets 0.7000 during this correction, but the multi-week view remains bearish.
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.
Forex Trading News
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
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."