Monday May 24, 2010 - 21:08:59 GMT
Share This Story
Westpac Institutional Bank - www.westpac.co.nz
Forex Blog - Morning Report (Westpac)
Morning Report Tuesday 25 May 2010
News and views
US equities drifted with a negative bias, the weekend news that Spain's central bank was forced to rescue a large regional bank, and Spanish unions threatening a June general strike, reminding investors that Europe's ills can continue to manifest themselves. The S&P500 is down 0.4%, financials (-1.5%) and banks (-3.0%) underperforming sectors. The VIX index stabilized further, down by around 10%. Commodities were mixed, but little changed in aggregate, copper continuing its bounce (+2.0%) and gold finding a bid again (+1.6%). US treasuries are 1-2bp lower across the curve, ignoring the good homes ales and activity data. US 3mth Libor continued its ascent, up 1.3bp to 0.51%, symptomatic of rising tension in the funding markets.
The US dollar index was stronger, rising from 85.65 to 86.50. EUR declined during a thin late Asian session (much of Europe was on holiday) from around 1.2500 to 1.2345, partly recovering in NY to 1.2400, but still took the honours for the 24hr underperformer. USD/JPY was stable between 90.00 and 90.50.
AUD was also stable (relative to recent weeks), contained between 0.8255 and 0.8340.
NZD ranged too, between 0.6700 and 0.6775. AUD/NZD's rebound was capped at 1.2360 despite several attempts higher.
US existing home sales jump 7.6% in April, following an upwardly revised 7.0% gain in March. This is evidence of the tax credit for homebuyers at work: the annualised sales pace of 5.77m was the highest since November last year, when the earlier version of the tax credit (which only applied to first homebuyers) was originally due to expire. The extended tax credit expired at the end of April but it will still be paid on sales agreed before that date provided they are completed by June 30. Because existing home sales are measured at completion, this data series could still show some strength in the next two months, although other housing transaction indicators such as new and pending home sales which are captured earlier in the sale process will probably weaken before then.
US Chicago Fed national activity index rises from 0.13 to 0.29 in April. This measure of current economic activity is based on 80 or so previously published indicators, so it doesn't real tell us anything new. However its April reading was highest since late 2006 and the fourth time in the last six months that is been above zero, indicating above average economic activity growth. That confirms there was solid momentum in the economy at the start of Q2.
Japanese all-industry index declined by 0.8% in March. Over the year, the index is 2.3% lower.
AUD/USD and NZD/USD outlook next 24 hours: With a largely neutral backdrop from NY, currencies should remain contained, the sessions risks skewed to the downside. AUD should hold between 0.8200 and 0.8350, while NZD should stay inside 0.6650-0.6800.
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."