Monday November 14, 2005 - 19:52:00 GMT
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Westpac Institutional Bank - www.westpac.co.nz
Forex: Westpac Institutional Bank Morning ReportNew Zealand Dollar: NZD quietly lower
After a quiet local session the NZD declined overnight, following major currencies lower on the back of weak data out of the U.K. In trading an expansive 15 point range, NZD failed to establish any direction during New Zealand time. The overnight session saw NZD quickly sold from its highs, setting a trend that followed for most of the session. A 0.6795 low was briefly touched but NZD has bounced to open around 0.6810.
Australian Dollar: AUD looking heavy
Yesterday’s local session saw AUD bounce off support at 0.7325 several times before following major currencies lower overnight. After ending Australian trading around the key support level, AUD rallied to post its daily high of 0.7344. From there it was a steady sell-off to support at 0.7275 which held for a couple of hours early this morning. AUD briefly sank through this level to a 0.7264 low, but did manage a bounce and opens around 0.7275 this morning.
After a week of USD strength, last week, the dollar started the domestic session on a fragile note yesterday. With Fed Chairman elect Bernanke’s confirmation hearing and the European Q3 GDP flash release ahead, local session position squaring saw the USD lose ground against the euro and yen, however the overnight session was once again dominated by USD gains. Despite no US data releases, comments by Japanese PM Koizumi that it is too soon for Japan to move away from its current ultra-easy monetary policy stance, saw USD/JPY race to a new 27 month high of 118.82. This USD strength, again pressured the euro, which fell to a new 2 year low of 1.1660, while a weaker-than expected PPI release also saw the GBP erase early gains to trade an intraday low of 1.7438.
Japan current account surplus rebounded in Sep.
Rising to ¥1859bn from ¥1216bn in Aug with the firming income account surplus (¥1014bn) only partly offset by the ongoing service deficit
of ¥249bn and ¥18bn JPY in net transfers. The trade surplus widened to ¥1112bn but to keep it in perspective it still down 22.6% in the year as imports (19.7%yr) have been rising faster than exports (8.9%yr) on rising energy prices.
No major US data to report.
Canadian auto sales fall 7.9% in Sep.
This was in line with previous guidance from StatsCan, who also suggested that October sales probably rebounded by 3%.
UK producer prices tame.
Although input prices rose 0.3% in Oct, the annual rate fell from 10.2% yr to 7.7% yr, due to favourable base effects. Core output price inflation fell from 2.1% yr to just 1.3% yr, its lowest for the year so far. These results suggest that pressure on the CPI from the factory sector is abating.
Events Today USD/JPY at 27 month high after Koizumi comments
Country Release Last Forecast
NZ Q3 Retail Trade %qtr 1.3% 1.6%
Sep Retail Trade %mth 0.2% flat
US Oct PPI/Core 1.9%/0.3% -0.2%/0.2%
Oct Retail Sales/ex-auto 0.2%/1.1% -0.4%/0.5%
Nov NY Fed Empire State Survey 12.1 20
Fedspeak: Moskow and Santomero.
Eur Q3 GDP Flash 0.3% 0.6%
Ger Q3 GDP (Prelim) flat 0.7%
Nov ZEW Economic Sentiment 39.4 45
UK Oct RICS House Price Balance –21 –16
Oct CPI %yr 2.5% 2.6%
Sep Leading Index 0.1% n/f
Can Sep Manufacturing Shipments 3.3% flat
Latest Research papers/Publication
• NZ Weekly Forex Outlook (14 November)
• NZ Housing Equity Withdrawal (10 November)
• NZ Q3 HLFS Review (10 November)
• NZ Q3 QES and LCI Review (8 November)
• NZ Weekly Forex Outlook (7 November)
• NZ Weekly Interest Rate Wrap-up (7 November)
• NZ net migrant flows close to trough (4 November)
• NZ Q3 labour market preview (3 November)
• NZ Weekly Interest Rate Wrap-up (1 November)
• NZ Weekly Forex Outlook (31 October)
• RBNZ October OCR Review (27 October)
• NZ Weekly Forex Outlook (25 October)
• NZ Weekly Interest Rate Wrap-up (25 October)
These papers/publications are available on Online Research on
Westpac Institutional Bank’s website (www.wib.westpac.co.nz)
Westpac Banking Corporation ABN 33 007 457 141 incorporated in Australia (NZ division). Information current as at 24 May 2005. 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 regulated for the conduct of investment business in the United Kingdom by the Financial Services Authority. © 2004 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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