Monday December 5, 2005 - 20:37:28 GMT
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Westpac Institutional Bank - www.westpac.co.nz
Forex: Westpac Institutional Bank Morning ReportNew Zealand Dollar NZD continues strong run
The NZD started the week on a strong note yesterday, continuing the recent surge in buying seen last Friday. The currency opened the day on its lows around 0.7115 and after a fairly quiet morning was bought steadily in the afternoon to around 0.7145. From there the NZD bounced a couple of times, finding support at 0.7135, before the USD was sold across the board in the London session. The NZD failed to break through 0.7200 and we open this morning around 0.7190.
Australian Dollar: AUD sees monthly high
For the most part of the day the AUD followed a similar path to the NZD. Opening around 0.7465 AUD was quiet for most of the local session, briefly being sold to a support level around 0.7135 late in the day. From there it was steadily bought higher, finding support at 0.7475 and 0.7495 and briefly reaching a 0.7528 high. The AUD has sold off around 10 points and opens this morning around 0.7515.
Major Currencies: USD down as rally pauses; yen falls broadly
In a session bereft of major data the market turned its focus to the yen which has been hit hard lately due to the BoJs ultra-accommodative monetary policy. The USD climbed to 121.40 yen, its highest level since March 2003, before easing back to 120.73 by early afternoon in New York. The euro also recovered some ground against the dollar to reach a session high of 1.1820 partially aided by its rally against the yen, which saw the single currency reach a record high of 142.70 yen. The dollar showed little reaction to the ISM non-manufacturing index number, which came out roughly as expected.
Japanese Q3 GDP likely to be revised higher.
The MoFs excellent survey of incorporated enterprises points to an upward revision to perhaps 0.8% (3.2% annualised) this Friday. Surprisingly strong capex data is behind the revision.
US ISM non-manufacturing roughly as expected.
The headline number fell to 58.5 from 60.0 (mkt f/c 59.0). However, it would be fair to say that whereas October's jump overstated the strength, Nov's slight drop understates the strength. Several key activity components rose: employment (to 57.0 from 52.9), new orders (59.5 from 58.2), new export orders (57 from 54.5, not seasonally adjusted) in all 3 cases the responses are roughly in line with pre-hurricane trends. Prices paid fell to 74.2 from 78.0, retreating further from the 81.4 Katrina-related high in September.
Eurozone retail sales revised down.
Oct sales rose 0.5% m/m, as expected. Sep's figure was revised down to -0.9%, from -0.4%. The services PMI edged up to 55.2 (highest reading since July 2004) from 54.9. Out of the large economies Italy and Spain improved almost 2 points, whilst German sentiment softened fractionally.
UK services PMI marginally weaker.
The headline number fell to 55.8 from 56.1. New business and business expectations made slight gains but the overall response was dragged down by employment, outstanding business and, encouraging for inflation, a drop in input prices.
Date Country Release Last Forecast
Aust Q4 Westpac-ACCI Survey 50.4 n/f
Oct Housing Finance (no.) 4.6% 2.0%
Oct Trade Balance AUDbn 1.6 1.45
Q3 Public Spending 1.8% 0.6%
US Q3 Nonfarm Productivity Revisions 4.1% 4.7%
Oct Factory Orders 1.7% 2.3%
Oct Pending Home Sales 0.3% n/f
Jpn Oct Household Spending %yr 1.0% n/f
Eur Nov Retail PMI 50.4 n/f
Ger Oct Factory Orders 3.0% 2.5%
UK BRC Retail Sales Monitor
Oct Industrial Production 0.5% flat
Can BoC Rate Decision 3.0% 3.25%
Nov IVEY PMI 64.866.0
Latest Research papers/Publication
RBNZ Dec MPS Preview (5 December)
NZ Weekly Forex Outlook (5 December)
NZ Weekly Forex Outlook (28 November)
NZ Weekly Forex Outlook (21 November)
NZ Q3 Retail Sales Review (15 November)
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)
These papers/publications are available on Online Research on
Westpac Institutional Banks 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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