13 January 2010
Wednesday
Fundamental Outlook at 1500 GMT (EDT + 0500)
€
The euro appreciated vis-à-vis the U.S. dollar today as the single currency tested offers around the US$ 1.4580 level and was supported around the $1.4455 level. Traders are trying to digest one report that suggests the Obama administration is going to impose a major tax on banks that borrowed funds under the Troubled Asset Relief Program. Another report suggests the Obama administration is considering extending capital gains tax relief, a move that could support the equity market. Data released in the U.S. today saw MBA mortgage applications up 14.3% from the prior reading of 0.5%. The Federal Reserve's Beige Book was released today and confirmed improvements in business conditions in ten of the twelve Fed districts but noted the labour market is "generally weak" in most of the Fed districts. Data to be released in the U.S. tomorrow include the December import price index, December retail sales, weekly initial jobless claims, continuing claims, and November business inventories followed by many data on Friday including consumer price inflation, industrial production, and more. Chicago Fed President Evans today reported the U.S. economy may expand 3% to 5% in 2010 and sees a "stable" outlook for prices. Philadelphia Fed President Plosser spoke overnight and hawkishly said "This increase in rates must occur well before the unemployment rate or other measures of resource slack have diminished to acceptable levels." In eurozone news, German gross domestic product growth data confirmed the economy fell 5.0% in 2009, a sharp reversal from 2008's +1.3% expansion. This represented the first contraction in six years and the largest decline since World War II. French data released today saw the November current account gap narrow to €3.8 billion. European Union President Van Rompuy reported Greece's fiscal problems are a major concern the entire European Union but reported the Greek government is "already taking the necessary further steps to address the situation." Euro bids are cited around the US$ 1.3885 level.
¥/ CNY
The yen depreciated vis-à-vis the U.S. dollar today as the greenback tested offers around the ¥91.50 level and was supported around the ¥90.90 level. Today's range was relatively tight as dealers continued to focus on China and weigh the impact of its recent policy moves on the yen. Data released in Japan overnight saw December corporate bankruptcy cases off 0.35% m/m and 16.59% y/y. The yen also continues to weaken a little bit on uncertainty regarding Japan Airlines, a company whose stock has declined to ¥7 and could be delisted. Global risk aversion is also moving lower and this is negatively impacting the yen as traders move into higher-yielding assets. Japan's economic problems continue. First, bank lending continued to move lower in December, probably on account of weakening business confidence. Second, Japan remains mired in a deflationary cycle that will require the central bank to maintain its ultra-easy monetary policy. Dealers are also paying close attention to comments from new finance minister Kan following his recent appointment and comments that moved the yen last week. The Nikkei 225 stock index lost 1.32% to close at ¥10,735.03. 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 ¥133.05 level and was supported around the ¥131.50 level. The British pound moved higher vis-à-vis the yen as sterling tested bids around the ¥148.75 level while the Swiss franc moved higher vis-à-vis the yen and tested offers around the ¥90.00 figure. In Chinese news, the U.S. dollar depreciated vis-à-vis the Chinese yuan as the greenback closed at CNY 6.8267 in the over-the-counter market, down from CNY 6.8275. Traders are still talking about People's Bank of China's decision to lift reserve requirements at commercial banks by 50bps from 15.50% to 16.00%, effective 18 January. This is PBoC's most effective weapon to enact implement a contractionary monetary policy and follows a move to reduce monetary accommodation last week by selling one-year bills at higher rates. China Investment Corporation executive Peng moved the markets this week when he said "I think the dollar is at its bottom now. There will be very limited space for the dollar to drop further. The yen is what, I think, has the worst outlook. The yen will continue to drop, unlike the dollar, which will not serve for long as a source of funding carry trades."
₤
The British pound appreciated sharply vis-à-vis the U.S. dollar today as cable tested offers around the US$ 1.6295 level and was supported around the $1.6135 level. Bank of England Monetary Policy Committee member Sentance moved the markets today when he said "At some point you have to say we have increased the amount of stimulus enough. It doesn't mean you are going to withdraw it but you don't have to keep adding to it. The Bank is approaching the point where we need to hold back and wait and see how that's flowing into the recovery." Data released in the U.K. today saw November manufacturing production flat m/m and off 5.4% y/y while November industrial production was up 0.4% m/m and off 6% y/y. Cable bids are cited around the US$ 1.5730 level. The euro gained ground vis-à-vis the British pound as the single currency tested offers around the ₤0.8965 level and was supported around the ₤0.8915 level.
Technical Outlook at 1330 GMT (EDT + 0500)
(Bid Price) (Today's Intraday Range)
EUR/ USD 1.4561 1.4579, 1.4455
USD/ JPY 91.30 91.48, 90.89
GBP/ USD 1.6277 1.6293, 1.6135
USD/ CHF 1.0154 1.0217, 1.0137
AUD/USD 0.9257 0.9265, 0.9188
USD/CAD 1.0341 1.0410, 1.0331
NZD/USD 0.7415 0.7425, 0.7371
EUR/ JPY 132.96 133.06, 131.50
EUR/ GBP 0.8943 0.8966, 0.8914
GBP/ JPY 148.62 148.73, 146.68
CHF/ JPY 89.89 90.01, 89.16
Support Resistance Support Resistance
EUR/ USD USD/ JPY
L1. 1.4355 1.4925 86.95 93.20
L2. 1.4175 1.5145 84.85 95.50
L3. 1.3795 1.5360 82.30 98.85
GBP/ USD USD/ CHF
L1. 1.5755 1.6890 1.0040 1.0370
L2. 1.5355 1.7310 0.9920 1.0580
L3. 1.4950 1.7615 0.9750 1.0695
AUD/ USD USD/ CAD
L1. 0.8870 0.9425 1.0150 1.0590
L2. 0.8685 0.9600 0.9920 1.0820
L3. 0.8225 0.9840 0.9735 1.1060
NZD/ USD EUR/ JPY
L1. 0.7145 0.7645 125.70 135.75
L2. 0.6880 0.7785 122.50 138.20
L3. 0.6750 0.8215 118.55 141.00
EUR/ GBP EUR/ CHF
L1. 0.8795 0.9175 1.4575 1.4875
L2. 0.8675 0.9290 1.4305 1.5010
L3. 0.8320 0.9430 1.4110 1.5450
GBP/ JPY CHF/ JPY
L1. 144.90 149.20 85.30 91.60
L2. 141.20 150.60 83.35 93.60
L3. 135.95 152.20 81.40 97.95
SCHEDULE
Sunday, 10 January 2010
all times GMT
(last release in parentheses)
2330 Australia December TD Securities inflation (0.3% m/m)
2330 Australia December TD Securities inflation (2.1% y/y)
Monday, 11 January 2010
all times GMT
(last release in parentheses)
0500 China Federal Reserve Bank of St. Louis President Bullard speaks
0745 France November industrial production (-0.8% m/m)
0745 France November industrial production (-8.4% y/y)
0745 France November manufacturing production (-0.8% m/m)
0745 France November manufacturing production (-8.8% y/y)
0815 CH November retail sales (3.1% y/y)
1315 Canada December housing starts (158,500))
1330 Canada November building permits (18.0% m/m)
1745 US Federal Reserve Bank of Atlanta President Lockhart speaks
2200 NZ Q4 NZIER business opinion survey (36.0)
2350 Japan November trade balance (¥949.0 billion)
2350 Japan November current account (¥1.376 trillion)
2350 Japan December bank lending (0.2% y/y)
2350 Japan December M2 + CD money supply (3.3% y/y)
Tuesday, 12 January 2010
all times GMT
(last release in parentheses)
N/A Japan December economy watchers' survey, current (33.9)
N/A Japan December economy watchers' survey, outlook (34.5)
0001 UK December BRC retail sales monitor (4.1%)
0001 UK December RICS house price balance (35.0%)
0030 Australia November home loans (-1.4%)
0030 Australia November investment lending (-0.6%)
0730 France December Bank of France business sentiment (99.0)
0930 UK November visible trade balance (-₤7.108 billion)
0930 UK November total trade balance (-₤3.213 billion)
0930 UK November DCLG house prices (-2.2% y/y)
1230 US December NFIB small business optimism (88.3)
1330 US November trade balance (-US$ 32.9 billion)
1330 Canada November international merchandise trade (C$ 400 million)
1330 Canada November new housing price index (0.3% m/m)
Wednesday, 13 January 2010
all times GMT
(last release in parentheses)
N/A UK December NIESR gross domestic product estimate (0.2%)
N/A US MBA mortgage applications (0.5%)
N/A US Federal Reserve Bank of Philadelphia President Plosser speaks
0430 UK December bankruptcies (-11.4% y/y)
0600 Japan December machine tool orders (-8.4% y/y)
0745 France December consumer price index (0.1% m/m)
0745 France December consume price index (0.4% y/y)
0745 France December CPI, harmonized (0.2% m/m)
0745 France December CPI, harmonized (0.5% y/y)
0745 France November current account (-€4.5 billion)
0815 Germany December GDP growth (1.3%)
0900 Italy November industrial production
0930 UK November industrial production (0.0% m/m)
0930 UK November industrial production (-8.4% y/y)
0930 UK November manufacturing production (0.0% m/m)
0930 UK November manufacturing production (-7.8% y/y)
1000 Eurozone November industrial production (-0.6% m/m)
1000 Eurozone November industrial production (-11.1% y/y)
1900 US Federal Reserve Beige Book
2145 NZ November building permits (11.7% y/y)
2350 Japan November machine orders (-4.5% m/m)
2350 Japan November machine orders (-21.0% y/y)
2350 Japan December domestic corporate goods price index (0.1% m/m)
2350 Japan December domestic corporate goods price index (-4.9% y/y)
Thursday, 14 January 2010
all times GMT
(last release in parentheses)
N/A NZ December REINZ housing price index (0.2% m/m)
N/Z NZ December REINZ housing price index (41.5% y/y)
0030 Australia December employment change (31,200)
0030 Australia December unemployment rate (5.7%)
0700 Germany December consumer price index (0.7% m/m)
0700 Germany December consumer price index (0.8% y/y)
0700 Germany December CPI, harmonized (0.9% m/m)
0700 Germany December CPI, harmonized (0.8% y/y)
1245 Eurozone European Central Bank interest rate decision
1330 US December advance retail sales (1.3%)
1330 US December retail sales, ex-autos (1.2%)
1330 US Weekly initial jobless claims (434,000)
1330 US Continuing jobless claims (4.802 million)
1330 US December import price index (1.7% m/m)
1330 US December import price index (3.7% y/y)
1500 US November business inventories (0.2%)
2145 NZ December credit card spending (0.7% m/m)
Friday, 15 January 2010
all times GMT
(last release in parentheses)
N/A Germany December wholesale price index (0.7% m/m)
N/A Germany December wholesale price index (-3.2% y/y)
0200 NZ December non-resident bond holdings (65.4)
0430 Japan Bank of Japan Chief Economist speaks
0815 CH December producer and import prices (0.0% m/m)
0815 CH December producer and import prices (-3.3% y/y)
0900 Italy December consumer price index
1000 Eurozone December consumer price index (0.1% m/m)
1000 Eurozone December consumer price index (0.5% y/y)
1000 Eurozone December CPI, core (1.0% y/y)
1000 Eurozone November trade balance (€6.3 billion)
1330 US December consumer price index (0.4% m/m)
1330 US December consumer price index (1.8% y/y)
1330 US December CPI, ex-food and energy (0.0% m/m)
1330 US December CPI, ex-food and energy (1.7% y/y)
1330 US January Empire State manufacturing index (2.55)
1415 US December industrial production (0.8%)
1415 US December capacity utilization (71.3%)
1455 US Mid-January University of Michigan consumer sentiment (72.5)
1930 US Federal Reserve Bank of San Francisco President Yellen speaks
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