Monday March 8, 2010 - 22:14:55 GMT
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Westpac Institutional Bank - www.westpac.co.nz
Forex Research - Morning Report
Morning Report Tuesday 9 March 2010
News and views
The evening sessions were quiet eventwise, and risk markets consolidated their recent gains, with minor activity seen in currencies. The S&P500 is currently up 0.1%, having fluctuated little in the session so far, and European equities were similarly subdued. Commodities were also little changed, oil +0.2%, and copper -0.1%, although gold lost 1.0%, perhaps on the abatement of European concerns. US 10yr notes added 3bp in yield, supply concerns this week ($74bn will be auctioned) cited.
The US dollar is slightly firmer since the Sydney close, from 80.10 to 80.50. The Greek PM's comment that a spread of Greece's crisis would mean a lower euro was a likely factor. EUR fell from a session high of 1.3705 to 1.3606. GBP was the evening's underperformer, falling from almost 1.5200 to 1.4994, which may have been related to concerns regarding repatriation of large gilt payments. USD/JPY ranged sideways around the 90.30 level.
AUD peaked in NY at 0.9133, and then fell with the EUR to 0.9077, recovering later to 0.9100. Prominent journalist Terry McCrann posted a bullish-AUD piece on Australia's resource boom.
NZD peaked at 0.7036 and then dipped to 0.6986, recovering to 0.7000. AUD/NZD made an intraday low of 1.2978 and sits just under 1.3000, the market wary of further positioning ahead of the RBNZ on Thursday.
No US data to report.
European Sentix investor confidence little changed at -7.5 in Mar, from -8.2 in Feb. This slight rise only partially reversed the Feb decline, which we suspect reflects ongoing concerns about growth prospects and budget deficits.
German industrial production rose 0.6% in Jan, following a cumulative 2% output fall in Q4 last year. The breakdown of the Jan rise was not especially flattering, with capital and consumer goods and construction all declining, but intermediate goods and energy posting gains.
Canadian housing starts rose 6.1% in Feb, reflecting the ongoing uptrend in urban single family housing, now up 101% yr despite a modest 0.5% gain in Feb, but boosted last month by a 19% surge in multiple starts.
AUD/USD and NZD/USD outlook next 24 hours: AUD has immediate resistance at 0.9140 and support around 0.9070, with today's business confidence report posing some event risk. NZD's levels are 0.7080 and 0.6950, locally inspired action unlikely before Thursday.
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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