Monday April 19, 2010 - 20:19:22 GMT
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Westpac Institutional Bank - www.westpac.co.nz
Forex Research - Morning Report
Morning Report Tuesday 20 April 2010
News and views
US equities stabilised as it emerged the SEC did not unanimously approve of charging Goldman Sachs with fraud, voting 3-2. Also helping put a floor under the market was a surge in the US leading index and solid earnings reports from Citigroup and Daimler. The S&P500 is currently up 0.2%. For commodities it was a different story, the CRB composite index down 1.1% on extended digestion of the Goldman news, as well as China's clampdown on property speculation (the Shanghai index fell 4.8%, the property index -6.8%). Copper (-0.2%) did recover on the positive US news above, but oil (-2.0%) suffered further from OPEC production quota violation. US 10yr notes rose 4bp in yield, as appetite waned below 3.80%.
The US dollar is slightly firmer at 81.00. EUR fell to 1.3416 during Europe, showing it's still vulnerable to developments around Greece (the Greece-German 10yr government bond spread blew out to a fresh record high), but recovered on the US news to 1.3483. GBP underperformed the majors, the prospect of a hung parliament raised with the better Liberal showing recently, falling to 1.5190 before recovering to 1.5330. USD/JPY rose from 91.60 to 92.45.
AUD rose from around 0.9160 at the Sydney close to 0.9230 currently.
NZD tracked roughly sideways between 0.7070 and 0.7100. AUD/NZD rose from 1.2940 to 1.3000.
US leading index jumps 1.4% in March. That is the twelfth straight rise for the leading index, and the equal strongest of that sequence (matching a 1.4% rise in May last year). Of the ten components of the index, in March just three declined: capital goods orders, consumer sentiment and money supply.
UK house prices up 6.0% yr in April according to the Rightmove index of asking prices. The monthly rise was 2.6%, up for the fourth month running.
AUD/USD and NZD/USD outlook next 24 hours: Relief buying and RBA minutes should support AUD above 0.9160, but resistance between 0.9200 and 0.9250 should slow any further rise. NZD should break above 0.7100 on a bullish CPI release this morning, successive targets being 0.7160 and 0.7200.
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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