Monday August 2, 2010 - 20:15:42 GMT
Share This Story
Westpac Institutional Bank - www.westpac.co.nz
Forex Research - Morning Report (Westpac)
Morning Report Monday 2 August 2010
News and views
Bears lose a claw. Equity investors started the week on a bold note, the Eurostoxx 50 closing 2.9% higher, and the S&P500 continuing the mood to be currently up 2.2% (above the 200d moving average). Sunday's China PMI was less weak than the unofficial consensus, and a batch of earnings reported by European banks and US corporates were solid. Consensus-beating US data (ISM manufacturing and construction spending) helped the final surge in NY. Commodities benefited particularly from the US data, the CRB index gapping 2.3% higher to early May levels, with oil +3.1%, copper +2.3%, but gold unchanged. Shipping costs continue to rebound. US 3mth Libor fell another 1bp to 0.445%, almost 10bp lower than during June's funding fears. US 10yr treasury yields rose 5bp to 2.96%, a sticky response given the magnitude of the equities move. Fed Chairman Bernanke gave a balanced speech which was largely a recap of recent testimony.
Risky currencies fared well amid the bullish sentiment. The US dollar index lost ground to 80.90, around mid-April levels. EUR made a fresh two-month high, rising from 1.3050 to 1.3195. Top performer was the NOK, which gained 1.8%. Safe-haven yen was the worst of the majors, unchanged around 86.50 vs the USD.
AUD ground higher from NZ's close of 0.9090 (Australia had a bank holiday) to 0.9146, a fresh 2Â½ month high.
NZD broke above yesterdays 0.7300 resistance to 0.7342. AUD/NZD remained consolidative around 1.2450.
US ISM manufacturing slips from 56.2 to 55.2 in July, its third straight month of decline though not as weak as some of the regional Fed factory indices were. The detail showed orders 5 pts lower, production 4 pts down but jobs actually rose from 57.8 to 58.6.
US construction spending rose 0.1% in June against expectations of a fall, driven by a 10% jump in public sector housing. But private sector residential and non-residential spending fell, and there was a steep downward revision to May spending as well.
Euroland PMI manufacturing revised up from 56.5 to 56.7, making the July gain over June now 1.1 pts, though the index is still down from the recent peak in April of 57.6.
UK PMI factory slips from 57.6 to 57.3 in July, its second month of modest slippage from its April-May peak at 58.0.
AUD/USD and NZD/USD outlook next 24 hours: AUD broke above 0.9070 minor resistance yesterday, so that level now becomes supportive. NZD also broke resistance, at 0.7300, but looks toppish between 0.7300 and 0.7340.
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."