Wednesday October 13, 2010 - 20:24:49 GMT
Share This Story
Westpac Institutional Bank - www.westpac.co.nz
Forex Research - Morning Report (Westpac)
Morning Report Thursday 14 October 2010
News and views
The USD continues to be sold and risk appetite continues to firm. Financial markets were buoyed today by a raft of positives in the last 12 hours. Stronger than expected Japanese machinery orders and China new loans buoyed risk early. JP Morgan Chase beat earnings estimate handily too giving equities and risk sentiment an added boost in US trading. Higher yielding currencies outperformed - in particular the NZD, AUD, CAD, and NOK. NZD/USD pushed from 0.7550/60 and to highs of 0.7634 and outperformance of this currency pushed the AUD/NZD to a low of 1.2980 in the European session. AUD/USD pushed up from around 0.9850 to fresh post-float highs of 0.9937.
EUR/USD rose from around 1.3950 to 1.4000 but failed to build a beach head above this big level and was sold back down to 1.3920 before stabilising near 1.3960 into the NY close. USD/JPY was rangebound between 81.75 and 81.95.
Other asset classes moved in unison to the general currency trend: commodities appreciated in general - gold +$20/oz to highs above $1374/oz while copper rose 0.9%; the S&P500 rose 0.9% to fresh six-month highs; and the US 10year bond was overall flat on the day.
US import prices down 0.3% in Sep. This reflected lower energy prices; ex energy import prices rose 0.3% as the US dollar weakened. Export prices rose 0.6% in Sep.
Japanese core machinery orders rose a surprising 10.1% in Aug. That chunky gain takes 3mth annualised growth to 25.1% from -4.8% previously and the yoy rate to 24.1% from 15.9%.
Japanese bank lending fell by 1.8% over the year to Sep, a slight improvement on August's -1.9% outcome. Bank lending at city banks is down 3.9%yr while lending at regional banks is up 0.4%yr.
Euroland industrial production up 1.0% in Aug, in line with Westpac's forecast but at the top end of expectations. Capital goods production led the way but consumer durables and intermediate goods output also rose.
UK unemployment rises 5k in Sep, its second consecutive rise after a string of falls. The report also showed slower employment growth although the jobless rate eased from 7.8% to 7.7%.
UK consumer confidence plunges in Sep. The Nationwide index fell from 62 to 53, its lowest since March last year.
Canadian new housing prices up 0.1% in Aug. This followed a small fall in July so prices have effectively stalled - another sign of lost momentum in the Canadian housing market.
AUD/USD and NZD/USD outlook next 24 hours: A bevy of data is due in NZ today - REINZ housing prices for September, BNZ's manufacturing PMI for September and August retail sales. The market is expecting a 0.3% rise in headline retailing while Westpac looks for a fractionally softer 0.2% increase. The Westpac-Melbourne Institute survey of unemployment expectations and the MI survey of inflation expectations is due in Australia. The uptrend in both AUD and NZD remains in excellent shape. Parity is in sight for AUD. NZD should clear important 0.7635 resistance more forcefully in coming days opening the door to a run at the July 2008 highs of 0.7760+.
.Westpac Banking Corporation ABN 33 007 457 141 incorporated in Australia (NZ division). Information current as at 13 August 2010. 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 Westpacâ€™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 registered in England as a branch (branch number BR000106) and is authorised and regulated by The Financial Services Authority. Westpac Europe Limited is a company registered in England (number 05660023) and is authorised and regulated by The Financial Services Authority. Â© 2010 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."