Wednesday March 7, 2007 - 20:04:04 GMT
Share This Story
Westpac Institutional Bank - www.westpac.co.nz
Forex Research - Westpac Institutional Bank Morning ReportNew Zealand Dollar NZD consolidates ahead of MPS
Yesterday saw a quiet local session as the NZ market took a breath ahead of todayâ€™s RBNZ decision. NZD opened a touch above 0.6800 and drifted higher during the morning posting a high of 0.6853. NZD/USD immediately pushed lower following the strong Australian GDP number as NZD/AUD was sold. The rest of the day saw NZD/USD grind slowly higher with the theme continuing in overnight trading â€“ the currency unable to make a convincing break past the 100 day moving average at 0.6852.
Australian Dollar: Rates on hold but strong GDP
The combination of the better than expected GDP data and a positive open for the Australian and Asian equity markets provided a solid bid tone to the AUD yesterday morning. The AUD pushed up from around 0.7745 at the open to post a local session high of 0.7780. However USD/JPY weakness capped any further gains for the AUD. Offshore trading saw AUD/USD touch a high of 0.7790 in very quiet trading conditions. NZD/AUD recovered some ground post the GDP data but the pair drifted slightly higher heading into todayâ€™s RBNZ decision.
Major Currencies: Currencies return to normal ranges
US Fed Beige Book: modest expansion with stable prices.
Most districts reported modest expansion in economic activity, but several districts noted some slowing. Almost all districts reported that housing markets remained weak. Consumer spending growth was steady in the majority of districts, although some were affected by bad weather. Most districts reported further expansion in labour markets with continued tight supply of skilled and professional workers. Price pressures were little changed overall.
US - ADP private payrolls estimate 57k in Feb.
The ADP payrolls estimate was launched with much fanfare last year as a sneak preview of the upcoming Bureau of Labor Statistics payrolls report. But it had some spectacular misses, â€śpredictingâ€ť falling jobs when they in fact rose and booming jobs when the official data were sluggish. Because of this, ADP has expanded their survey to cover even more firms, and rejigged their methodology to more fully replicate the way the BLS calculates the data. Their revised profile for 2006 does, it seems, better fit with official private sector payrolls but the real test will come this week: their estimate for private payrolls growth in February is just 57k. That fits with market expectations of a sluggish number; our forecast is 90k (75k excluding government jobs) but we suspect risks are skewed more to the downside.
Former Fed chairman Alan Greenspan
said that the decline in US home sales had reached a bottom, according to reports â€“ a comment perhaps intended to offset the impact of his recession chat earlier in the week.
German factory orders down 1.0% in Jan.
Orders were revised up sharply from â€“0.2% in Dec, but gave all that back by falling in Jan, mainly due to a slump in foreign orders of capital goods. With retail sales collapsing in Germany in January (reported last week), economic growth in the first quarter looks like being quite a bit softer than the 0.9% recorded in Q4 2006.
UK consumer confidence edged up slightly in Feb,
perhaps reflecting relief that rates did not rise that month. The March BoE monetary policy committee meeting began last night, with the decision tomorrow at noon. We nervously forecast no change in rates. Also, in the UK, the BRC shop price index was little changed in Feb. Its fall in Jan accurately revealed the widespread price discounting that was subsequently captured by the Jan CPI, but there is no such dramatic signal this time round.
Country Release Last Forecast
NZ RBNZ Monetary Policy Statement 7.25% 7.50%
Q4 Terms of Trade â€“1.9% 4.6%
US Initial Jobless Claims w/e 3/3 338k 315k
Jpn Feb Bank Lending %yr 1.7% 1.8%
Latest Research papers/Publication
Eur ECB Repo Rate Decision 3.5% 3.75%
Ger Jan Industrial Production â€“0.5% 1.0%
UK BoE Repo Rate Decision 5.25% 5.25%
Feb BRC Shop Price Index %yr 1.8% n/f
Can Feb Housing Starts 17.3% â€“10.0%
Jan New House Prices flat n/f
BoC Governor Dodge Speech
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.
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."