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DAILY MARKET COMMENTARY
15 December 2009
Tuesday
Fundamental Outlook at 1500 GMT (EDT + 0500)
€
The euro moved lower vis-à-vis the U.S. dollar today as the single currency tested bids around the US$ 1.4520 level and was capped around the $1.4660 level. Traders dumped the common currency on news that Oesterreichische Volksbanken AG, Austria's fourth largest bank, has been placed on a "watch list" by the central bank and financial market regulator. Additionally, the Austrian government yesterday agreed to nationalized troubled lender Hypo Group Alpe Adria. Moreover, Greek Prime Minister Papandreou spoke yesterday and pledged to reduce the country's deficit from 12.7% of GDP to 3% in 2013. Data released in the U.S. today saw the New York Empire State manufacturing index decline to 2.55 in December from 23.51 in November. Also, the November producer price index was up 1.8% m/m and 2.4% y/y at the headline level and up 0.5% m/m and 1.2% y/y at the ex-food and energy level. Also, November industrial production printed at +0.8% and capacity utilization printed at 71.3%. Additionally, net long-term TICS flows fell to US$ 20.7 billion in October from US$ 40.7 billion while October total net TICS flows came in at –US$ 13.9 billion, a shar reversal from US$ 133.5 billion. In eurozone news, the German government reported it needs to consolidate €25-30 billion in spending in 2011 to meet budgetary requirements. Traders are now citing growing growth differentials between the U.S. and eurozone that favour the U.S. dollar. Data released in the eurozone today saw the German ZEW December economic sentiment index fall to 50.4 from 51.1 in November. Also, French November consumer price inflation was up 0.1% m/m and +0.4% y/y. Euro bids are cited around the US$ 1.4505 level.
¥/ CNY
The yen depreciated vis-à-vis the U.S. dollar today as the greenback tested offers around the ¥89.70 level and was supported around the ¥88.55 level. Finance minister Fukii reported the government must keep bond issuance below ¥44 trillion for the fiscal year that begins in April 2010. The Bank of Japan December quarterly Tankan survey was released yesterday and evidenced an improvement in corporate sentiment among large manufacturers. The headline diffusion index improved to -24 from -33 in the September quarterly survey, marking the third consecutive quarterly improvement. Sentiment among large non-manufacturers improved to -22 in December from -24. On a negative note, it was reported that large firms plan to reduce capital spending by 13.8% in the fiscal year ending in March, a downward revision from the 10.8% decline expected in the September tankan. Collectively, these data paint a mixed picture that evidences some improvement in current sentiment but a less-than-sanguine outlook for the future. Traders cite an increasing chance of actual yen-selling intervention by Japanese monetary authorities if the yen remains at elevated levels. The Nikkei 225 stock index lost 0.22% to close at ¥10,083.48. 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 offers around the ¥130.45 level and was supported around the ¥129.50 level. The British pound moved lower vis-à-vis the yen as sterling tested offers around the ¥145.50 level while the Swiss franc moved higher vis-à-vis the yen and tested offers around the ¥86.25 level. In Chinese news, the U.S. dollar depreciated vis-à-vis the Chinese yuan as the greenback closed at CNY 6.8270 in the over-the-counter market, down from CNY 6.8292. People's Bank of China official Zhu Min last week reported China can experience more than 8% economic growth. Zhu added China had "good reason" to devalue its currency during the global financial crisis but instead decided to "stabilize the renminbi exchange rate." The State Administration for Foreign Exchange said China will continue to implement foreign exchange reforms and PBoC indicated it will "improve" policy flexibility. Data released in China on Friday saw November industrial production up 19%. Also, November consumer price inflation was up +0.6% m/m.
Technical Outlook at 1330 GMT (EDT + 0500)
(Bid Price) (Today's Intraday Range)
EUR/ USD 1.4535 1.4662, 1.4523
USD/ JPY 89.61 89.63, 88.56
GBP/ USD 1.6221 1.6317, 1.6204
USD/ CHF 1.0398 1.0412, 1.0310
AUD/USD 0.9054 0.9173, 0.9049
USD/CAD 1.0627 1.0651, 1.0551
NZD/USD 0.7204 0.7280, 0.7192
EUR/ JPY 130.29 130.37, 129.52
EUR/ GBP 0.8959 0.8999, 0.8934
GBP/ JPY 145.39 145.41, 144.35
CHF/ JPY 86.12 86.20, 85.62
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
Tuesday, 15 December 2009
all times GMT
(last release in parentheses)
0030 Australia Q3 dwelling starts (-3.7%)
0030 Australia Reserve Bank of Australia meeting minutes
0645 CH December SECO economic forecasts
0745 France November consumer price index (0.1% m/m)
0745 France November consumer price index (-0.2% y/y)
0745 France November CPI, harmonized (0.1% m/m)
0745 France November CPI, harmonized (-0.2% y/y)
0815 CH Q3 industrial production (2.7% q/q)
0815 CH Q3 industrial production (-14.9% y/y)
0900 Italy Q3 labour costs (1.0% q/q)
0900 Italy Q3 labour costs (4.6% y/y)
0930 UK November consumer price index (0.2% m/m)
0930 UK November consumer price index (1.5% y/y)
0930 UK November CPI, core (1.8% y/y)
0930 UK November retail price index (0.3% m/m)
0930 UK November retail price index (-0.8% y/y)
0930 UK October DCLG house prices (-4.1% y/y)
1000 Germany December ZEW, economic sentiment (51.1)
1000 Germany December ZEW, current situation (-65.6)
1000 Eurozone Q3 labour costs (4.0% y/y)
1000 Eurozone December ZEW survey, economic sentiment (51.8)
1330 US November producer price index (0.3% m/m)
1330 US November PPI, ex-food and energy (-0.6% m/m)
1330 US November PPI (-1.9% y/y)
1330 US November PPI, ex-food and energy (0.7% y/y)
1330 US December Empire state manufacturing index (23.51)
1330 Canada November leading indicators (0.7% m/m)
1330 Canada Q3 labour productivity (0.0% q/q)
1400 US October total net TICS flows (US$ 133.5 billion)
1400 US October net long-term TICS flows (US$ 40.7 billion)
1415 US November industrial production (0.1%)
1415 US November capacity utilization (70.7%)
1800 US December NAHB housing market index (17)
2330 Australia October Westpac leading index (0.3% m/m)
2350 Japan October tertiary industry index (-0.5% m/m)
Wednesday, 16 December 2009
all times GMT
(last release in parentheses)
N/A Germany November wholesale price index (-0.4% m/m)
N/A Germany November wholesale price index (-7.0% y/y)
0000 Australia December DEWR skilled vacancies (2.4% m/m)
0030 Australia Q3 gross domestic product (0.6% q/q)
0030 Australia Q3 gross domestic product (0.6% y/y)
0600 Japan November machine tool orders (-8.6% y/y)
0900 Italy November consumer price index
0930 UK November claimant count rate (5.1%)
0930 UK November jobless claims, net change (12,900)
0930 UK October average earnings, bonus (1.2%)
0930 UK October ILO unemployment rate (7.8%)
1000 Eurozone October trade balance (-€897.0 million)
1000 Eurozone November consumer price index (0.2% m/m)
1000 Eurozone November consumer price index (0.6% y/y)
1000 Eurozone November consumer price index, core (1.2% y/y)
1200 US MBA mortgage applications
1330 US November consumer price index (0.3% m/m)
1330 US November CPI, ex-food and energy (0.2% m/m)
1330 US November consumer price index (-0.2% y/y)
1330 US November CPI, ex-food and energy (1.7% y/y)
1330 US Q3 current account balance (-US$ 98.8 billion)
1330 US November housing starts (529,000)
1330 US November building permits (551,000)
1330 Canada October manufacturing sales (1.4% m/m)
1530 Japan Bank of Japan Policy Board meeting
1915 US Federal Open Market Committee interest rate decision
Thursday, 17 December 2009
all times GMT
(last release in parentheses)
N/A Japan Bank of Japan Policy Board interest rrate decision
0000 Australia November HIA new home sales (-6.0% m/m)
0200 NZ December NBNZ business confidence (43.4)
0500 Japan October leading index (89.7)
0500 Japan October coincident index (94.3)
0900 Italy Q3 unemployment rate
0930 UK November retail sales (0.4% m/m)
0930 UK November retail sales (3.4% y/y)
1000 CH December Credit Suisse ZEW survey, expectations (56.4)
1000 Eurozone October construction output
1100 UK December CBI distributive trades
1200 Canada November consumer price index (-0.1% m/m)
1200 Canada November consumer price index (0.1% y/y)
1200 Canada November CPI, core (0.1% m/m)
1200 Canada November CPI, core (1.80% y/y)
1330 US Weekly initial jobless claims
1330 US Continuing jobless claims
1330 Canada October international securities transactions (C$ 13.59 billion)
1500 US November leading indicators (0.3%)
1500 US December Philadelphia Fed index
Friday, 18 December 2009
all times GMT
(last release in parentheses)
N/A Japan November Nationwide department store sales (-10.5% y/y)
N/A Japan November Tokyo-area department store sales (-13.1% y/y)
0700 Germany November producer prices (0.0% m/m)
0700 Germany November producer prices (-7.6% y/y)
0745 France December business confidence (89)
0900 Italy October industrial orders
0900 Italy October industrial sales
0900 Germany December Ifo, business climate (93.9)
0900 Germany December Ifo, current assessment (89.1)
0900 Germany December Ifo, expectations (98.9)
0900 Eurozone October current account (-€ 5.4 billion)
0930 UK November mortgage approvals (61,000)
0930 UK Q3 total business investment (-3.0% q/q)
0930 UK Q3 total business investment (-21.7% y/y)
0930 UK November public sector net cash requirement (₤5.9 billion)
0930 UK November public sector net borrowing (₤11.4 billion)
0930 UK November M4 money supply
1000 Eurozone October trade balance (€3.7 billion)
1000 Eurozone October trade balance (₤6.8 billion)
1030 CH December KOF economic forecast
1330 Canada October wholesale sales (0.2% m/m)
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