DAILY MARKET COMMENTARY
1 December 2009
Tuesday
Fundamental Outlook at 1500 GMT (EDT + 0500)
€
The euro gained ground vis-à-vis the U.S. dollar today as the single currency tested offers around the US$ 1.5115 level and was supported around the $1.4970 level. A positive day in some global equities markets – including U.S. shares – contributed to the common currency's ascent. French finance minister Lagarde today said Dubai's financial problems do not pose a "systemic" risk to other large economies. Dutch finance minister Bos said there is no reason to be "overly pessimstic." Eurozone finance ministers today confirmed that Luxembourg Prime Minister Juncker will remain the chairman of the Eurogroup of finance ministers. The French government today said it expects the French economy to decline between 2% and 2.1% in 2009. Data released in the eurozone today saw the October unemployment rate steady at 9.8%. Also, German retail sales were up 0.5% m/m in October and off 1.7% y/y and the EMU-16 PMI manufacturing survey climbed to 51.2. In U.S. news, data released in the U.S. today saw November ISM manufacturing fall to 53.6 from the prior reading of 55.7 while the November ISM prices paid fell to 55.0 from 65.0. October construction spending was unchanged m/m and October pending home sales were up 3.7% m/m and 28.6% y/y. Euro bids are cited around the US$ 1.4720 level.
¥/ CNY
The yen depreciated vis-à-vis the U.S. dollar today as the greenback tested offers around the ¥87.50 level and was supported around the ¥86.15 level. As expected, Bank of Japan's Policy Board kept its overnight call rate target unchanged at 0.10% today. BoJ yesterday indicated it will offer three-month loans to commercial banks at 0.1% under at ¥10 trillion program to counter deflation. BoJ Governor Shirakawa will meet with Prime Minister Hatoyama this week about how to deal with Japan's deflationary threat. Yesterday, finance minister Fujii reported commitments to other Group of Seven countries regarding currency flexibility preclude him from unilateral intervention but said it may be used bilaterally or multilaterally. Last Friday, BoJ is said to have contacted Japanese and non-Japanese commercial banks on Friday to check exchange rate levels, a de facto verbal intervention that sometimes leads to actual intervention. The Nikkei 225 stock index gained 2.91% to close at ¥9,572.20. 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 ¥131.15 level and was supported around the ¥129.30 level. The British pound moved higher vis-à-vis the yen as sterling tested offers around the ¥144.40 figure while the Swiss franc moved higher vis-à-vis the yen and tested bids around the ¥87.05 level. In Chinese news, the U.S. dollar appreciated vis-à-vis the Chinese yuan as the greenback closed at CNY 6.8240 in the over-the-counter market, up from CNY 6.8235. People's Bank of China advisor Fan Gang yesterday reported the Chinese economy will likely expand 8% to 9% in 2010. Chinese and European officials held a summit meeting in China but European officials including ECB President Trichet and Ecofin's Juncker apparently failed to convince China to change its yuan policy. Data released in China today saw November PMI unchanged at 55.2.
Technical Outlook at 1330 GMT (EDT + 0500)
(Bid Price) (Today's Intraday Range)
EUR/ USD 1.5084 1.5116, 1.4970
USD/ JPY 86.67 87.52, 86.15
GBP/ USD 1.6617 1.6646, 1.6390
USD/ CHF 0.9993 1.0074, 0.9969
AUD/USD 0.9243 0.9270, 0.9104
USD/CAD 1.0467 1.0577, 1.0404
NZD/USD 0.7265 0.7295, 0.7140
EUR/ JPY 130.74 131.26, 129.31
EUR/ GBP 0.9075 0.9152, 0.9065
GBP/ JPY 144.74 144.42, 141.62
CHF/ JPY 86.72 87.04, 85.72
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, 1 December 2009
all times GMT
(last release in parentheses)
N/A Japan November official reserve assets (US$ 1.056 trillion)
N/A Germany October retail sales (-0.2% m/m)
N/A Germany October retail sales (-3.9% u/u)
N/A UK November Nationwide house prices (0.4% m/m)
N/A UK November Nationwide house prices (2.0% y/y)
0030 Australia October building approvals (2.7% m/m)
0030 Australia October building approvals (11.7% y/y)
0330 Australia Reserve Bank of Australia interest rate decision
0500 Eurozone October unemployment rate (9.7%)
0645 CH Q3 gross domestic product (-0.3% q/q)
0645 CH Q3 gross domestic product (-2.0% y/y)
0830 CH November purchasing managers' index (54.0)
0845 Italy November PMI, manufacturing (49.2)
0850 France November PMI, manufacturing
0855 Germany November PMI, manufacturing
0855 Germany November unemployment change (-26,000)
0900 Eurozone November PMI, manufacturing
0930 UK November PMI, manufacturing (53.7)
1500 US November ISM, prices paid (65.0)
1500 US October pending home sales (6.1% m/m)
1500 US October construction spending (0.8% m/m)
1500 US November ISM manufacturing (65.0)
1700 US Philadelphia Fed President Plosser speaks
2350 Japan November monetary base (4.4% y/y)
Wednesday, 2 December 2009
all times GMT
(last release in parentheses)
0930 UK November PMI, construction (46.2)
1000 Eurozone October producer price index (-0.4% m/m)
1000 Eurozone October producer price index (-7.7% y/y)
1315 US November ADP employment change (-203,000)
1730 US Richmond Fed President Lacker speaks
1900 US Fed Beige Book
2330 Australia November performance of service index (54.8)
2350 Japan Q3 capital spending (-21.7%)
Thursday, 3 December 2009
all times GMT
(last release in parentheses)
0130 Australia October retail sales (-0.2% m/m)
0200 Australia November ANZ commodity prices (4.6%)
0745 France Q3 ILO unemployment rate (9.5%)
0845 Italy November PMI, services
0850 France November PMI, services
0855 Germany November PMI, services
0900 Eurozone November PMI, services
0930 UK November PMI, services (56.9)
1000 Eurozone Q3 gross domestic product (0.4% q/q)
1000 Eurozone Q3 gross domestic product (-4.1% u/u)
1000 Eurozone October retail sales (-0.7% m/m)
1000 Eurozone October retail sales (-3.6% y/y)
1245 Eurozone European Central Bank interest rate decision
1330 US Q3 non-farm productivity (9.5%)
1330 US Weekly initial jobless claims
1330 US Continuing jobless claims
1500 US November ISM, non-manufacturing (50.6)
Friday, 4 December 2009
all times GMT
(last release in parentheses)
N/A UK November Halifax house prices (1.2% m/m)
N/A Canada November employment, net change (-43,200)
N/A Canada November unemployment rate (8.6%)
0815 CH November consumer price index (0.6% m/m)
0815 CH November consumer price index (-190,000)
1330 US November non-farm payrolls, net change (-190,000)
1330 US November unemployment rate (10.2%)
1330 US November average hourly earnings (0.3% m/m)
1330 US November average hourly earnings (2.4% y/y)
1330 US November average weekly hours (33.0)
1500 US October factory orders (0.9%)
1500 US Philadelphia Fed President Plosser speaks
1500 Canada November Ivey purchasing managers index (61.2)
1815 US St. Louis Federal Reserve President Bullard speaks
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