Monday February 11, 2013 - 20:23:20 GMT
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Westpac Institutional Bank - www.westpac.co.nz
Forex - Westpac Morning Report
Morning Report Tuesday 12 February 2013
It was a quiet start to the week. With much of East Asia on holiday and little fresh news, markets were confined to recent ranges. Of some interest was a Bloomberg report that the G7 is considering a statement to calm concerns of a global currency war, to be released before the weekend’s G20 meeting. The S&P500 is currently down 0.2%, as is the CRB commodities index (copper futures -1.0%, Brent oil futures -0.5%, gold -1.1% to a 2-month low). US 10yr treasury yields are unchanged at 1.95% after briefly spiking to 1.98%.
The US dollar index (DXY) is little changed. EUR was more interesting, bouncing off 1.3360 to 1.3428 following a speech by ECB council member Weidmann which said the euro isn’t seriously overvalued and the ECB shouldn’t consider weakening it. USD/JPY rose from 92.52 to 93.55 after Amari said the government wants the Nikkei 225 at 13,000 by year end, and Kuroda (candidate for BOJ Governor) said additional easing can be justified. AUD extended its domestic session slide to 1.0262 before rebounding to 1.0294. Outperformer NZD similarly fell to 0.8310 initially but rebounded sharply to 0.8378. That pushed AUD/NZD down from 1.2360 to 1.2280.
No US data to report, and very little elsewhere either.
French industrial production fell 0.1% in Dec, its third fall in four months, to be down 2.1% yr.
AUD and NZD Outlooks: More housing data plus electronic spending from NZ, and then a business confidence survey from Australia are unlikely to produce much drama for markets. Tonight’s Fedspeak from vice-chair (and dove) Yellen will be watched, while fx traders will scan for any G7 statement during the next few days.
NZD/USD 1 day: The rebound of the past 10 hours should extend beyond 0.8390.
NZD/USD 1-3 month: The positive trend since May remains intact as long as 0.8250 holds, targeting 0.8493 and beyond (0.8570 next, 0.8840+ sometime this year).
NZ 2yr swap yield 1 day: Opening today down 1bp at 2.89%.
NZ 2yr swap yield 1 month: With the 2.94% medium term target attained, our next major target level is 3.18%, supported by improving NZ data and higher US yields.
AUD/USD 1 day: A small corrective bounce towards 1.0350 is expected today.
AUD/USD 1-3 month: Remains inside an 18-month consolidation triangle, awaiting an eventual break higher.
AUD/NZD 1-3 month: The break below 1.2400 points to 1.2100. The technical picture is consistent with relative data flow and central bank biases.
Westpac Banking Corporation ABN 33 007 457 141 incorporated in Australia (NZ division). Information current as at 12 February 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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