Monday January 21, 2013 - 19:47:35 GMT
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Westpac Institutional Bank - www.westpac.co.nz
Forex - Morning Report
Morning Report Tuesday 22 January 2013
Markets were quiet amid the US holiday, currencies well contained. There was only minor European news for markets to digest, including the German central bank’s pronouncement that its economy’s prospects have improved, a Eurogroup delay in defining terms for Eurozone bank bailouts, and the confirmation of a new Eurogroup head. S&P500 futures are 0.3% higher, while US 10yr treasury note futures imply around 1bp higher in yield. The Greek 10yr yield fell 58bp to 10.42% - a two year low – following IMF satisfaction with reform progress to date.
The US dollar index (DXY) is little changed. EUR traded sideways in a narrow 1.3300-1.3332 range. USD/JPY firmed from 89.34 to 89.89 ahead of the important BOJ meeting today (but still managed to form a technically bearish outside down day). AUD was quiet, initially firming from 1.0507 to 1.0526 but slipping during the London afternoon to 1.0504. NZD similarly ranged between 0.8349 and 0.8373. AUD/NZD ranged between 1.2560 and 1.2595.
AUD and NZD Outlooks: Market interest will be focussed on the Japanese central bank’s policy announcement (around midday Tokyo time), any failure to match heightened market expectations regarding fresh stimulus likely to boost the JPY and hurt the AUD and NZD.
NZ 2yr swap yield 1 day: Opening today unchanged at 2.81%.
NZ 2yr swap yield 1 month: Breaking above 2.80% towards 3.00%, supported by improving NZ data.
NZD/USD 1 day: The downward correction since 11 Jan may be complete at 0.8334; a push above 0.8380 today would bolster that view.
NZD/USD 1 month: The positive trend since May remains intact, targeting 0.8470 and beyond.
AUD/USD 1 day: The downward correction since 11 Jan may be complete at 1.0486; a push above 1.0525 today would bolster that view.
AUD/USD 1 month: Remains inside an 18-month consolidation triangle, awaiting a break higher.
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.
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