Tuesday January 22, 2013 - 19:10:46 GMT
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Westpac Institutional Bank - www.westpac.co.nz
Forex - Morning Report
Morning Report Wednesday 23 January 2013
Sentiment among asset classes was mixed during a volatile overnight session. Positive news included a successful 10yr Spanish bond syndication and an above consensus German economic sentiment survey, while US data (Richmond region manufacturing, existing home sales) disappointed. Earlier, the Japanese central bank announced new stimulus measures as expected but disappointed with the timing (open-ended asset purchases start in January 2014). The S&P500 is currently up 0.1% after spending much of the session in the red. Commodities are moderately higher, Brent oil +0.5%, copper +0.6% and gold +0.2%. US 10yr treasury yields fell from 1.88% to 1.83% during the London afternoon. Eurozone peripheral yields fell following the Spanish syndication, Portugal’s 10yr down 20bp to a fresh 2-year low of 5.89%.
The US dollar index (DXY) is slightly lower. Underperformer EUR was volatile between 1.3267 and 1.3372 but is little changed on the day, boosted by the positive news above but stung by a negative German bank profit warning unfounded rumours the German central bank head had resigned. The yen outperformed following the BoJ disappointment, USD/JPY falling from 90.13 pre-BoJ to 88.37. AUD extended its Sydney session rally from 1.0550 to 1.0579. NZD similarly extended from 0.8390 to 0.8431. AUD/NZD ground higher from 1.2540 to 1.2570.
AUD and NZD Outlooks: The key event locally today is Australia’s Q4 CPI release, Westpac’s economists estimate the RBA core measure rose by 0.8% (vs 0.65% consensus) which would be AUD supportive. If passed, tonight’s US House vote on raising the debt ceiling for three months should boost risk sentiment. BoE minutes and Canada’s central bank meeting will be watched.
NZ 2yr swap yield 1 day: Opening today down 1bp at 2.82%.
NZ 2yr swap yield 1 month: Breaking above 2.80% towards 3.00%, supported by improving NZ data.
NZD/USD 1 day: Support today is at 0.8380 (Friday’s high) for a push above 0.8430.
NZD/USD 1 month: The positive trend since May remains intact, targeting 0.8470 and beyond.
AUD/USD 1 day: Support today is at 1.0525 (Monday’s high) for a push above 1.0580.
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 23 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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