Thursday April 15, 2010 - 21:40:20 GMT
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Westpac Institutional Bank - www.westpac.co.nz
Forex Research - Morning Report
Morning Report Friday 16 April 2010
News and views
The US equities market slightly extended its bull run to make a fresh high since Sep-08. The S&P500 is up 0.2%, strong NY manufacturing survey data offsetting a disappointing rise in jobless claims. Commodities are little changed, oil (-0.4%) and copper (-0.3%). US 10yr treasuries shed 2bp in yield. Foreign demand for US long-term securities bounced in February, led by treasuries, although corporate debt demand fell.
The US dollar is slightly stronger. EUR underperformed, falling from 1.3640 to 1.3520, and stabilising around 1.3575. Greek officials said they may cancel the planned dollar bond issue given weak demand, and the IMF said it is sending a team to Greece next week after it requested financing talks. GBP fell from 1.5500 to 1.5387 but completely recovered during the European afternoon. The Daily Telegraph released a poll which points to a conservative party victory. USD/JPY ranged between 92.70 and 93.50.
AUD initially slipped from 0.9350 to 0.9311 before stabilising between 0.9320 and 0.9340.
NZD slipped from 0.7150 to 0.7104, hardly recovering. AUD/NZD stepped higher, from around 1.3080 to 1.3130.
US regional Fed factory surveys upbeat in April. The NY Fed's Empire State survey jumped from 23 to 32 this month (its second highest reading for four years) and the Philadelphia Fed survey rose from 19 to 20 (its second strongest reading for five years). All the key detail in the NY survey was solid although the Philly report showed orders stronger but slower growth in shipments and jobs.
US industrial production up 0.1% in Mar, but factory output was up a much stronger 0.9% - the difference due to a 6% contraction in utility output following the very cold weather earlier in the year.
Net purchases of US securities increased from $15bn to $47bn in Feb, correcting for the below trend flow data at the start of the year.
US initial jobless claims jumped 24k to 484k last week, and a week earlier continuing claims rose 73k to 4639k, both large gains by recent standards. However the Labor Dept said that the rise was due more to "administrative factors" such as seasonality distortions around Easter than economic reasons.
US NAHB housing market index up from 15 to 19 in April. That's the equal highest reading for homebuilder sentiment since early 2008, and suggests that improved weather and extended tax credits for homebuyers might finally be impacting on how builders feel about sector prospects.
UK consumer confidence plunges from 81 to 72 in April, according to the Nationwide BS survey. That's the steepest fall since the dark days of 2008 and would reflect election uncertainty which is fuelling concerns about the economic recovery.
AUD/USD and NZD/USD outlook next 24 hours: AUD is finding 0.9360 an obstacle, and will need a catalyst to break higher. 0.9300 should be supportive on the day. NZD is similarly rangebound today between 0.7100 and 0.7160.
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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