Thursday January 10, 2013 - 20:32:49 GMT
Share This Story
Westpac Institutional Bank - www.westpac.co.nz
Forex - Morning Report
Morning Report Friday 11 January 2013
Sentiment remained elevated, supporting pro-risk currencies. The earlier news of China’s surprisingly strong imports and exports in December resonated during the London session. The ECB meeting left rates unchanged as expected but its president at the press conference surprised by signalling that any further easing is firmly off the near term agenda, noting the “positive contagion” in European financial markets at present. That boosted the EUR and other European currencies but briefly hurt the AUD, NZD and US equities among others. The S&P500 recovered, though, to be up 0.4% currently. US 10yr treasury yields rose from 1.86% to 1.91%, but then fell to 1.87% after a strong 30yr auction. Peripheral Eurozone government bonds were strong, the Italian 10yr yield down 14bp to a 2yr low of 4.13% and Spain’s down 23bp following strong auctions.
The US dollar index (DXY) is around 1% lower. That’s mainly due to EUR’s outperformance following the ECB press conference, up from around 1.3100 to 1.3262. GBP tagged along from around 1.6050 to 1.6162, the BOE remaining on hold as expected. Safe-haven yen underperformed, USD/JPY grinding up from 88.00 to 88.34. AUD ground higher after its China-data surge from 1.0550 to 1.0595 – a 4 month high. NZD rose from 0.8400 to 0.8455 and then consolidated. AUD/NZD was volatile between 1.2510 and 1.2570.
US initial jobless claims rose 4k to 371k in the week ended Jan 5, the fourth consecutive weekly rise from the recent low of 344k in early December. The claims range in 2012 was 342k to 392k apart from the spike to 451k in the aftermath of superstorm Sandy. This first reading for 2013 is in the upper half of last year’s (normal) range whereas the last reading for 2012 was on the range mid-point!
US wholesale inventories rose 0.6% in Nov. Durables were up 0.4%, non-durables by 0.8%. Most of the rise was due to volumes this month, not prices.
Canadian new house prices rose 0.1% in Nov for a 2.2% yr annual pace. Building permits fell 17.9% in Nov due to a 31% plunge in non-residential consents, an 11% fall in multiple residential approvals, and a 4% fall in house approvals.
ECB on hold at 0.75%. ECB chief Draghi maintained the view from December that “Later in 2013 economic activity should gradually recover”, though “he risks surrounding the economic outlook for the euro area remain on the downside. But he sounded less willing to admit to policy easing being imminent. In Dec there was discussion of a rate cut: “Did we discuss interest rate cuts? ...There was a wide discussion but, in the end, the prevailing consensus was to leave the rates unchanged”. Today when asked, the decision to leave rates unchanged was unanimous which he said implied no-one on the Council was pushing for lower rates.
Bank of England on hold at 0.5%. No statement issued as usual.
NZD and AUD outlook: There’s no data of note out locally today, but there’s more Chinese data – CPI and PPI.
NZD/USD 1 day: Supported at 0.8400 for a push to 0.8475.
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 higher at 2.79%.
NZ 2yr swap yield 1 month: Breaking above 2.80% towards 3.00%, supported by improving NZ data.
AUD/USD 1 day: Supported at 1.0535 for an eventual push above 1.0600.
AUD/USD 1 month: Currently breaking above a 17-month triangle, which if sustained, argues for a push to 1.0800.
Westpac Banking Corporation ABN 33 007 457 141 incorporated in Australia (NZ division). Information current as at 11 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."