Monday January 7, 2013 - 19:28:15 GMT
Share This Story
Westpac Institutional Bank - www.westpac.co.nz
Forex - Westpac Morning Report
Morning Report Tuesday 8 January 2013
Markets were subdued, the US fiscal deal-induced rally appearing to have run its course. There was little fresh news to provide direction, even the earlier announcement that global banking regulators would relax proposed liquidity rules failing to boost US banking stocks (down 0.9%). The S&P500 is currently down 0.6%, capping a 4-day rally worth 5.0%. Commodities were slightly weaker, Brent oil -0.;1%, copper -4%, and gold -0.7%. Iron ore nudged 0.4% higher to October 2011 levels, extending a 78% gain since September. US 10yr treasury yields consolidated between 1.88% and 1.92%. Eurozone yields saw little change, although Italy’s 10yr rose 8bp after former PM Berlusconi said he may become the finance minister in the next government.
The US dollar index (DXY) fell slightly. EUR rose from 1.3017 to 1.3120, boosted by an advisory report that the ECB had raised the bar for further rate cuts. USD/JPY’s spectacular rally since September (+14.6%) stalled amid profit-taking, pushing the pair from 88.40 to 87.64. AUD eked a narrow 1.0468-1.0507 range. NZD, on the other hand, pressed higher to 0.8368. AUD/NZD fell from 1.2640 to 1.2540.
No US data to report.
Canadian Ivey PMI rose from 47.5 to 521.8 in Dec, just a partial recovery of the 10.8 pt drop recorded in Nov.
Euroland Sentix investor confidence jumped from –16.8 to –7.0 in Jan. That is the steepest of the five consecutive gains since September (and the highest reading since global economic and financial market confidence nosedived in July 2007), buoyed initially by the ECB’s OMT announcement and most recently by the progress achieved by US policy-makers in averting the full impact of the fiscal cliff. The expectations component rose 13.5 pts while current conditions improved 6.7 pts.
Basel 3 liquidity coverage ratio compliance delayed 4 years to 2019. Under this rule banks would be required to hold enough liquid assets to survive a 30 day credit crunch. But the 2015 deadline was seen as too soon, threatening to bring on a credit crunch according to the likes of ECB’s Draghi. Under the new guidelines, 60% of the LCR obligations need to be met in 2015, then an additional 10% each year after till 100% in 2019.
Euroland producer prices slowed from 2.6% yr to 2.1% yr in Nov, further unwinding the August 2011 spike from 1.6% yr to 2.7% yr.
UK house prices rose 1.3% in Dec according to the Halifax, for a –0.3% yr annual pace.
NZD and AUD outlook: Locally we have Australia’s trade balance to watch today, Westpac forecasting a slightly larger deficit than consensus.
NZD/USD 1 day: Any correction today should be limited to the 0.8300-0.8325 area.
NZD/USD 1 month: The positive trend since May remains intact, targeting 0.8470 and beyond. Below 0.8150 breaks the trend.
NZ 2yr swap yield 1 day: Opening today 2bp lower at 2.76%.
NZ 2yr swap yield 1 month: Breaking above 2.80% towards 3.00%, supported by improving NZ data.
AUD/USD 1 day: Yesterday’s stall should extend today to 1.0450.
AUD/USD 1 month: Remains inside a 17-month triangle, and needs to break above 1.0600 to confirm an upward breakout.
Westpac Banking Corporation ABN 33 007 457 141 incorporated in Australia (NZ division). Information current as at 8 January 2013. 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 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. © 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."