Tuesday June 7, 2005 - 23:11:03 GMT
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Westpac Institutional Bank - www.westpac.co.nz
Forex: Westpac Institutional Bank Morning Report
Westpac Institutional Bank Morning Report
New Zealand Dollar: NZD up, more Eurokiwi's announced
The local market returned from Queen's Birthday holiday to find the NZD nearly 1% higher against the greenback. The currency ranged sideways just under 0.7100 for most of the day with no NZ data available to provide direction. Interest in the NZD was noted ahead of Thursday's MPS as traders adjust positions in response to the RBNZ's hawkish bias. Stop loss buying late in the local session saw the currency jump from just under 0.7100 to a high of 0.7139. Gains in NZD/USD continued in the offshore session on the back of a better bid EUR and AUD. The NZD reached an intraday high of 0.7162 before settling back around 0.7140. A large eurokiwi issuance announced last night by RBC for NZ$750mn also added to the NZD's fortunes.
Australian Dollar: Tight range seen ahead of RBA
AUD/USD traded a tight 41 point range during yesterday's local session. Low tier economic data released during the day failed to inspire the AUD. Late in the local session the AUD ground higher through resistance at 0.7765 to a daily high of 0.7678 aided by stop loss buying in the NZD. The offshore session saw the AUD extend its gains as the USD weakened on the back of Greenspan's comments. AUD/USD reached an intraday high of 0.7698 but has since settled back towards 0.7680 where it opens this morning.
Major Currencies: Dollar softer after Greenspan
Major currencies edged higher against the US dollar overnight, the main driver being comments by Fed Chairman Alan Greenspan. The euro
managed a high of 1.2315 but could not hold onto 1.2300 as European pessimism persists and opens around 1.2285 this morning. Sterling
was the major mover overnight, despite weak British retail and housing data it reached a two-week high of 1.8355, up over 0.5% against the dollar. JPY
also continued its recent trend strengthening to 106.55 overnight and remains around that level this morning.
Japanese Apr household spending down 3%yr.
That is slightly weaker than expectations of a 2% fall. This is not an impressive start to Q2 for consumption. PCE added 0.7ppts to Q1 GDP growth, an outcome we would be surprised to see repeated or bettered in Q2.
No major US data to report.
However US analysts were trying to come to grips with Fed chairman Greenspan's comments yesterday to an Asian audience. Was he saying bond yields were accurately warning of a slowdown? Were bond yields still a conundrum? Maybe his testimony to Washington law-makers will clear things up (doubtful though!).
German industrial production rises 1.1% in April.
This bounce in output reflected the up-tick in orders in March, but with orders falling away again, output is also likely to dwindle over the remainder of the second quarter.
UK house prices slip again.
HBOS reported a 0.6% fall in May, the third monthly decline for the year so far, a softer message than from the competing Nationwide survey. However HBOS still showed an annual price gain of 5.7%. This report followed weekend news if further weakness in high street spending.
Country Release Last Forecast
8 Jun NZ Q1 Value of Building Work -4.8% 7.0%
Aust RBA Policy Announcement 5.50% 5.50%
Apr Housing Finance (no.) 1.2% 2.0%
US Apr Wholesale Inventories 0.4% 0.7%
UK May BRC Shop Price Index
Can May Housing Starts 5.5% flat
9 Jun NZ RBNZ Monetary Policy Statement 6.75% 6.75%
Aust May Employment chg 6.9k -10k
May Unemployment Rate 5.1% 5.2%
US Fed Chair Greenspan Testimony
Latest Research papers/Publication
RBNZ Hot Points (7 June)
NZ Weekly Forex Outlook (7 June)
RBNZ June MPS Preview (3 June)
NZD: Testing investor enthusiasm (3 June)
Taxation - who pays and how much? (2 June)
Warning shot for the RBNZ (31 May)
NZ Weekly Forex Outlook (30 May)
NZ Weekly Interest Rate Wrap-up (30 May)
What are markets telling us? (27 May)L
These papers/publications are available on Online Research on
Westpac Institutional Banks website (www.wib.westpac.co.nz)
Westpac Banking Corporation ABN 33 007 457 141 incorporated in Australia (NZ division). Information current as at 24 May 2005. 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. © 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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