Monday February 27, 2006 - 20:05:06 GMT
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Westpac Institutional Bank - www.westpac.co.nz
Forex: Westpac Institutional Bank Morning Report
The yen advanced to a one-month high of 115.68 against the dollar during the Asian session after Japanese officials said the government supports central bank plans to end quantitative easing policies. In New York the USD regained some ground to open this morning around 116.19 after US new home sales for Jan slipped by 5% but failed to have any significant impact on the dollar. Against the euro the dollar traded in a relatively tight range of 1.1838 to 1.1869 with both currencies coming under selling pressure against JPY.
US new home sales fall 5% in Jan.
New home sales fell sharply, demonstrating that this sector of the housing market did not benefit from last monthâ€™s very mild weather conditions. The level of sales (1233k annualised) was the lowest for a year. The decline reflected falls in the northeast, midwest and south, although the west posted a rise in sales. The report reflects a continuation of the downtrend in most housing indicators which began in mid 2005. Adding to future downside risk, the stock of unsold homes rose to 528k (equivalent to 5.2 months supply) â€“ a new cyclical high.
The Canadian current account surplus widened
from C$7.8bn in Q3 to a new record C$13.3bn in Q4, consistent with the energy driven export surge last quarter.
Euroland money supply growth accelerated to 7.6% yr in Jan
, which can only reaffirm the ECBâ€™s view that low interest rates are fuelling stronger than desirable money and credit growth. This adds to the already compelling case for a March 2 rate rise.
UK mortgage approvals were up 46.5% yr in Jan
(bank figures only, data from the BBA), consistent with the generally robust flow of UK housing data.
Country Release Last Forecast
NZ Jan Dwelling Consents 21.0% â€“17.0
Aust Q4 Current Account Deficit AUDbn 13.5 13.3
Q4 Net Exports Contribution ppts â€“0.3 â€“0.4
Q4 Public Spending â€“1.8% 1.5%
Jan Credit 1.2% 1.1%
US Q4 GDP Prelim % ann'lsd 1.1%a 1.7%
Feb Chicago PMI 58.5 60.0
Feb Richmond Fed Index â€“4 6
Feb Consumer Confidence 106.3 104.0
Jan Existing Home Sales â€“5.7% â€“2.0%
Eur Jan CPI (F) %yr 2.4%a 2.4%
Feb CPI Flash %yr 2.4% n/f
Feb Business Climate Index 0.34 0.35
Feb Econ/Cons Confidence 101.8/â€“11 102.0/â€“11
Can Q4 GDP % annâ€™lsd 3.6% 2.8%
Latest Research papers/Publication
â€¢ NZ Weekly Forex Outlook (27 February)
â€¢ NZ Weekly Forex Outlook (20 February)
â€¢ An over-inflated problem (16 February)
â€¢ NZ Q4 Retail Sales (14 February)
â€¢ NZ Weekly Forex Outlook (13 February)
â€¢ NZ Economic Overview January 2006 (1 February)
â€¢ NZ Labour Market Preview (1 February)
â€¢ NZ Weekly Forex Outlook (30 January)
â€¢ NZ Terms of Trade:History & Significance (26 January)
â€¢ NZ RBNZ OCR Review (26 January)
â€¢ NZ Weekly Forex Outlook (23 January)
These papers/publications are available on Online Research on
Westpac Institutional Bankâ€™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. Â© 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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