Thursday November 11, 2010 - 22:37:01 GMT
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Westpac Institutional Bank - www.westpac.co.nz
Forex Research - Morning Report (Westpac)
Morning Report Friday 12 November 2010
News and views
US equities gapped lower at the physical market open, partly recovering to be down 0.7% currently. Bellwether Cisco provided weak guidance and shed 17% from its stock price. The energy sub-index (+0.2%) bucked the risk averse tone and made a two-year high. European credit concerns remained, with the French finance minister supporting Germany's call for bond investors to bear the costs of any bailouts, and German newspaper Handelsblatt saying the EU is preparing aid for Ireland. 10yr government bond yields for Ireland (+27bp), Spain (+14bp), and Italy (+14bp) underperformed Germany (unchanged). Commodities overall fell 0.7%, although copper (+1.4%) liked the Chinese data and made record high. Sugar (-7.4%) made a significant reversal on India's surplus. The US treasury market was closed for the Veteran's Day holiday.
That holiday also thinned global fx trading. The US dollar index continued its recovery, rising 0.9% after Sydney closed. EUR did the reverse, falling from 1.3800 to the current 1.3637, a five-week low. GBP fared the best, ranging between 1.6100 and 1.6180. USD/JPY firmed slightly from 82.10 to 82.55.
AUD opened in Europe around 1.0065 and followed the EUR lower to 0.9960.
NZD fell from 0.7874 to the current 0.7780. AUD/NZD largely held its ground above 1.2760 and is currently settled at 1.2880.
No US data.
Japanese core machinery orders fell by 10.3% in September after August's +10.1% surge. Annual core machinery order growth decelerated from 24.1% in August to 4.2% in September. Manufacturers' orders fell by 20.7% in the month, but are still 19.6% higher over the year; orders from non-manufacturers were up 3% in the month, but down 3.3%yr.
Japanese corporate goods prices rose 0.2% in October to be 0.9% higher over the year.
Spanish Q3 GDP growth was flat, ending the short-lived and insipid recovery from the deep recession of 2008 and 2009. GDP data for the larger European economies and the Euroland aggregate for Q3 are due tonight.
AUD/USD and NZD/USD outlook next 24 hours: Apart from G20 comment, there is little event risk for the currencies ahead of the European session. AUD has broken 1.0000 support and should drift towards 0.9900. NZD may test 0.7740 below.
.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
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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.
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