Tuesday, December 8, 2009

Foreign Exchange Research - Daily Market Commentary

DAILY MARKET COMMENTARY
7 December 2009

Monday

 


 

Fundamental Outlook at 1500 GMT (EDT + 0500)

 

 

The euro lost ground vis-à-vis the U.S. dollar today as the single currency tested bids around the US$ 1.4755 level and was capped around the $1.4905 level.  The common currency extended recent losses following Friday's better-than-expected U.S. November non-farm payrolls data that suggested the U.S. labour market is stronger-than-expected.  Traders continued to pare risk today, especially as U.S. equity markets finished just above flat for the day. Federal Reserve Bank of New York President Dudley reported the recession is over but added the economy remains weak, adding the Fed's exit policy will be "complicated but manageable."  Fed Chairman Bernanke spoke today and said inflation will likely remain "subdued" and added the U.S. economy will continue to face "formidable headwinds."  Bernanke added the pace of expansion is likely to be "moderate."  Fed-watchers continue to speculate the Fed will keep monetary policy largely unchanged for some time.  Fed funds futures pared their bets that the Fed will raise rates as early as mid-2010.  In eurozone news, European Central Bank President Trichet testified "the eurozone economy shows increasing signs of recovery" but noted uncertainty remains high.  Trichet also noted inflation expectations remain "firmly anchored."  ECB member Quaden, referring to when the ECB would begin to remove policy accommodation, said "Let's wait a bit, because right now we have forecasts that are still, by definition, uncertain. We will wait for more information in the months to come."  Data released in Germany today saw October manufacturing orders off 2.1% m/m and 8.5% y/y. Euro bids are cited around the US$ 1.4720 level.

 

¥/ CNY

The yen appreciated vis-à-vis the U.S. dollar today as the greenback tested bids around the ¥89.05 level and was capped around the ¥90.35 level.  Finance minister Fujii and World Bank President Zoellick did not discuss currencies or the economy in their meetings in Tokyo today.  Data released in Japan overnight saw Japan's foreign reserves increase to US$ 1.074 billion last month, a record high.   Deputy Prime Minister Nan verbally intervened last week and said "it would be good if the yen weakened a bit more."  Bank of Japan last week announced a plan to offer three-month loans to commercial banks at 0.1%, a ¥10 trillion program designed to counter deflationary pressures and reverse the yen's strength.  The Nikkei 225 stock index gained 1.44% to close at ¥10,167.60.  U.S. dollar offers are cited around the ¥94.75 level.  The euro moved higher vis-à-vis the yen as the single currency tested bids around the ¥132.35 level and was capped around the ¥134.35 level.  The British pound moved higher vis-à-vis the yen as sterling tested offers around the ¥148.80 level while the Swiss franc moved lower vis-à-vis the yen and tested bids around the ¥87.55 level. In Chinese news, the U.S. dollar appreciated vis-à-vis the Chinese yuan as the greenback closed at CNY 6.8291 in the over-the-counter market, up from CNY 6.8276.  Chinese Commerce Minister last week reported "The focus of global attention shouldn't be on the yuan's exchange rate, but the dollar's stability." The State Administration of Foreign Exchange on Friday reported the dollar's depreciation is a long-term trend.

 

Technical Outlook at 1330 GMT (EDT + 0500)

 

             (Bid Price)       (Today's Intraday Range)                              

           

EUR/ USD        1.4825                1.4903, 1.4755
USD/ JPY
          89.49                  90.36,   89.04
GBP/ USD
        1.6443                 1.6514, 1.6312
USD/ CHF
        1.0195                 1.0243, 1.0136
AUD/USD
         0.9126                 0.9187, 0.9051
USD/CAD
         1.0517                 1.0648,
1.0481
NZD/USD
         0.7131                0.7187, 0.7080
EUR/ JPY
         132.66                 134.34, 132.36
EUR/ GBP
        0.9014                 0.9062, 0.9005
GBP/ JPY
        147.13                 148.81, 146.62
CHF/ JPY
           87.75      88.96,   87.56

 

 

                                       

Support                       Resistance                   Support                    Resistance

 

EUR/ USD                                                            USD/ JPY

 

 

L1.       1.4470                          1.4915                             88.60               93.30 

L2.       1.4355                          1.5140                             87.10               95.50
L3.       1.4175                          1.5360                             86.10               98.85

 

   GBP/ USD                                                        USD/ CHF

 

L1.       1.6115                          1.6685                          1.0275                          1.0580

L2.       1.5720                          1.6830                          1.0040                          1.0695

L3.       1.5405                          1.7040                          0.9750                          1.0885

 

 AUD/ USD                                                         USD/ CAD

 

L1.       0.8450                          0.8830                          1.0535                          1.0945

L2.       0.8300                          0.9050                          1.0365                          1.1125

L3.       0.8070                          0.9120                          1.0155                          1.1355

 NZD/ USD                                                         EUR/ JPY

 

L1.       0.6880                          0.7125                          131.45                          135.75

L2.       0.6750                          0.7260                          129.75                          136.90

L3.       0.6535                          0.7395                          127.00                          138.75

 

 

  EUR/ GBP                                                        EUR/ CHF

 

L1.       0.8795                          0.8995                          1.5110                          1.5380

L2.       0.8675                          0.9105                          1.4905                          1.5580

L3.       0.8320                          0.9225                          1.4670                          1.5880

 

  GBP/ JPY                                                         CHF/ JPY

 

L1.       146.10                          152.50                            86.30                           88.65

L2.       142.05                          157.75                            85.40                           90.10

L3.       135.70                          161.70                            81.55                           91.60

 

 

SCHEDULE

 

 

Sunday, 6 December 2009

all times GMT

(last release in parentheses)

 

2230     Australia           November performance of construction index (50.9)

2350     Japan               November official reserve assets (US$ 1.056 trillion)

 

Monday, 7 December 2009

all times GMT

(last release in parentheses)

 

0030     Australia           November ANZ job advertisements (-1.7% m/m)

1100     Germany          October factory orders (0.9% m/m)

1100     Germany          October factory orders (-13.1% y/y)

1330     Canada            October building permits (1.6% m/m)

1700     US                   Federal Reserve Chairman Bernanke speaks

2000     US                   October consumer credit (-US$ 14.8 billion)

2145     NZ                   Q3 manufacturing activity (-4.8%)

2245     US                   Federal Reserve Bank of New York President Dudley speaks

2350     Japan               October current account (¥1.567 trillion)

2350     Japan               October trade balance, balance of payments (¥599.2 billion)

2350     Japan               November bank lending (1.6% y/y)

Tuesday, 8 December 2009

all times GMT

(last release in parentheses)

 

N/A      Japan               November economy watchers' survey, current (40.9)

N/A      Japan               November economy watchers' survey, outlook (42.8)

0001     UK                   November BRC retail sales monitor

0001     UK                   November RICS house price balance (34.0%)

0030     Australia           November NAB business conditions (12)

0030     Australia           November NAB business confidence (16)

0030     Australia           Q3 current account balance (-A$ 13.347 billion)

0500     Japan               October leading index (86.4)

0500     Japan               October coincident index (92.7)

0815     Australia           Reserve Bank of Australia Governor Stevens speaks

0930     UK                   October industrial production (1.6% m/m)

0930     UK                   October industrial production (-10.3% y/y)

0930     UK                   October manufacturing production (1.7% m/m)

0930     UK                   October manufacturing production (-9.3% y/y)

1100     Germany          October industrial production (2.7% m/m)

1100     Germany          October industrial production (-12.9% y/y)

1300     Australia           Q1 manpower survey

1315     Canada            November housing starts (157,400)

1400     Canada            Bank of Canada interest rate decision

2145     NZ                   November credit card spending (-0.2% m/m)

2330     Australia           December Westpac consumer confidence (-2.50%)

2350     Japan               Q3 gross domestic product (1.20% q/q)

2350     Japan               Q3 gross domestic product, annualized (4.80%)

2350     Japan               Q3 GDP deflator (0.20% y/y)

2350     UK                   November Nationwide consumer confidence (72)

 

Wednesday, 9 December 2009

all times GMT

(last release in parentheses)

 

N/A      UK                   November NIESR gross domestic product, estimate (-0.4%)

0030     Australia           October home loans (5.10%)

0030     Australia           October trade balance (-A$ 1.894 billion)

0030     Australia           October investment lending (-0.1%)

0030     UK                   Pre-Budget report

0645     CH                   November unemployment rate (4.0%)

0700     Germany          October trade balance (€10.6 billion)

0700     Germany          November consumer price index (-0.2% m/m)

0700     Germany          October current account (€9.4 billion)

0700     Germany          November consumer price index (0.3% y/y

0700     Germany          October imports (5.8% y/y)

0700     Germany          November CPI, harmonized (0.4% y/y)

0930     UK                   October trade balance (-₤7.194 billion)

1030     UK                   November BRC shop price index

1200     US                   MBA mortgage applications (2.1%)

1500     US                   October wholesale inventories (-0.9%)

2000     NZ                   Reserve Bank of New Zealand interest rate decision

2145     NZ                   Q3 terms of trade index (-9.0% q/q)

2350     Japan               October machine orders (10.5% m/m)

2350     Japan               October machine orders (-22.0% y/y)

2350     Japan               November domestic corporate goods price index (-0.7% m/m)

2350     Japan               November domestic corporate goods price index (-6.7% y/y)

 

Thursday, 10 December 2009

all times GMT

(last release in parentheses)

 

N/A      Japan               Q1 manpower survey

0000     Australia           December consumer inflation expectations (3.2%0

0030     Australia           November employment change (24,500)

0030     Australia           November unemployment rate (5.8%)

0100     Australia           Reserve Bank of Australia official speaks

0745     France              November non-farm payrolls

0750     France              October industrial production (-1.5% m/m)

0750     France              October industrial production (-10.4% y/y)

0750     France              October manufacturing production (-1.6% m/m)

0750     France              October manufacturing production (-11.0% y/y)

0830     CH                   Swiss National Bank interest rate decision

0900     Eurozone          European Central Bank monthly report

0900     Italy                  October industrial production (-5.3% m/m)

1000     Italy                  Q3 gross domestic product

1200     UK                   Bank of England interest rate decision

1200     UK                   Bank of England asset purchase program decision

1330     Canada            October international merchandise trade (-C$ 900 million)

1330     US                   October trade balance (-US$ 36.5 billion)

1330     US                   Weekly initial jobless claims (457,000)

1330     US                   Continuing jobless claims (5.465 million)

2145     NZ                   November food prices (-1.5% m/m)

 

Friday, 11 December 2009

all times GMT

(last release in parentheses)

 

0000     Japan               November consumer confidence (40.5)

0930     UK                   November PPI, input (2.6% m/m)

0930     UK                   November PPI, input (0.1% y/y)

0930     UK                   November PPI, output (0.2% m/m)

0930     UK                   November PPI, output (1.7% y/y)

0930     UK                   November PPI, core output (0.3% m/m)

0930     UK                   November PPI, core output (2.0% y/y)

1330     Canada            October new housing price index (0.5% m/m)

1330     US                   November import price index (0.7% m/m)

1330     US                   November import price index (-5.7% y/y)

1330     US                   November advance retail sales (1.4%)

1330     US                   November retail sales, ex-autos (0.2%)

1500     US                   University of Michigan consumer sentiment (67.4)

1500     US                   October business inventories (-0.4%)

 



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