Monday December 19, 2005 - 11:54:22 GMT
Share This Story
Mellon Bank Foreign Exchange - https://fx.mellon.com/
Forex: Mellon FX Daily - U.S. EditionKey Points
• USD-JPY steadies a little after last week’s losses.
• EUR-USD downside tentatively favoured, but US data (especially on housing) could be crucial this week.
• GBP weaker after Bean comments.
• US NAHB housing market index features today – UK RICS survey tonight.
remained soft at the Asian open this morning, but eventually recovered to briefly nudge through Friday’s high at 116.50. A move through the 116.50-80 area is needed to suggest some stabilisation after the scale of the sell-off seen since the middle of last week. Latest IMM data showed no change in the record net long position on USD-JPY, although quite simply this was because the latest reading (Tuesday’s close) was taken before the USD-JPY sell-off occurred. EURUSD net short positioning on the other hand fell sharply, reflecting the fact that EUR-USD had rallied ahead of the FOMC meeting. Some USD-JPY stabilisation (117.60 at least) is favoured this week and the market is likely to try and build a short-term base ahead of 115.00. However, volatility is likely to continue for a while yet and rallies in USD-JPY could run into various bouts of selling by those who missed out initially owing to the speed of the move lower.
looks like being steadier, although downside is tentatively favoured this week as long as US data releases continue to toughen up Fed rate hike risk for Q1 and beyond. 1.1930 needs to give way to open up some element of downside risk, although below 1.1850-1.1900 is also required to open things up further. US housing releases this week (see below) could be important in determining direction.
weakened this morning following comments over the weekend from BoE chief economist and MPC member Bean. He noted that recent CPI data had resolved one uncertainty for the MPC i.e. when CPI was set to peak out. He also said that if the data news pointed in one direction or another that they would not necessarily sit around until the spring doing nothing. There was nothing really concrete in this (much will depend upon the data) but it caught the market’s imagination and interest rate futures and GBP responded accordingly. 0.6825 also needs to break on EUR-GBP to keep this going.
– the National Association of Home Builders (NAHB) Indexi s the main data feature today after having fallen sharply last month to its lowest level since May 2003. The index is a combination of measures relating to current and expected sales and the number of prospective buyer inquiries. Key focus today will be whether last month’s sharp fall, coming after some weaker showings since the highs of May-Jul, was an outlier or a clear sign that activity is indeed starting to tail off sharply. If a clear scenario does emerge it could have ramifications for both FOMC policy expectations and the USD, although the market will also want to see other housing data (new home sales and housing starts are also due this week) before making any major conclusions.
– the RICS house price survey is due tonight and there is likely to be a further recovery in prices (possibly into positive
Data/event EDT Consensus*
CA Net portfolio balance (Oct) 08.30 -C$0.1bn last
CA Wholesale sales (Oct) m/m 08.30 +0.5%
US NAHB housing index (Dec) 13.00 61
GB RICS house prices (Nov) 19.30 -5%
Latest data Actual Consensus*
DE PPI (Nov) y/y +5.0% +4.9%
FR Current account (Oct) -€3.4bn -€2.7bn
EU Ind prod (Oct) m/m -0.8% -0.4%
* Consensus unless stated
2005, Mellon Financial Corporation Note: Although obtained from sources believed by us to be reliable, Mellon Financial Corporation and its affiliates cannot guarantee the accuracy or completeness of the information upon which this report is based. This report does not purport to disclose the risks or benefits of entering into particular transactions and should not be construed as advice in any specific instance. The views in this report constitute our judgement as of this date and are subject to change without notice.
Ian Gunner 44 20 7163 5996 06.40 EDT Monday May 31 2005
Forex Trading News
Daily Forex Market News
Forex news reports can be found on the forex research
headlines page below. Here you will find real-time forex market news reports
provided by respected contributors of currency trading information. Daily forex
market news, weekly forex research and monthly forex news features can be found
Real-time forex market news reports and features providing
other currency trading information can be accessed by clicking on any of the
headlines below. At the top of the forex blog page you will find the latest
forex trading information. Scroll down the page if you are looking for less
recent currency trading information. Scroll to the bottom of fx blog headlines
and click on the link for past reports on forex. Currency world news reports
from previous years can be found on the left sidebar under "FX Archives."