The euro moved lower vis-à-vis the U.S. dollar today as the single currency tested bids around the US$ 1.4320 level and was capped around the $1.4390 level. Data released in the U.S. today saw July personal income growth at 0.0%, up from June’s revised -1.1% decline. July personal spending printed at +0.2%, down from June’s revised print of +0.6%. Also, the July personal consumption expenditures deflator was off 0.8% y/y, worse than the 0.4% June reading. At the core level, the July core rate up 0.1% m/m and 1.4% y/y. Finally, the University of Michigan consumer sentiment indicator came in at 65.7, above the prior mid-August reading of 63.2 but below the July reading of 66.0. The common currency failed to sustain its gains through the North American session as U.S. equity prices retreated in the session. St. Louis Fed President Bullard was on the wires earlier and dovishly said the Fed needs to see much more “convincing” economic data before contemplating an increase in rates. In eurozone news, the European Commissions’s economic sentiment indicator improved to 80.6 from a reading of 76 in July. Many economists believe the eurozone economy will expand around 0.5% q/q in the third quarter. Bundesbank reported German banks expect a modest increase in lending volumes in the second half of 2009 and in 2010, corroborating the central bank’s assessment there is no credit crunch in the eurozone’s largest economy. German Chancellor Merkel today reported the German economy might contract 5% or 6% in 2009. Euro bids are cited around the US$ 1.3900 figure.
¥/ CNY
The yen appreciated vis-à-vis the U.S. dollar today as the greenback tested bids around the ¥93.40 level and was capped around the ¥94.05 level. All eyes are focused on this weekend’s general election in Japan where the long-incumbent Liberal Democratic Party looks poised to lose its stronghold on power to the Democratic Party of Japan. Some Japan-watchers believe this will result in increased Japanese government bond issuance to finance the expected increase in public works spending. It is unclear how a DPJ victory would impact the yen. Japan is expected to battle deflation through early 2012 and will need all the help it can get from its slumping export sector through a weaker yen. Many data were released in Japan overnight. First, the July unemployment rate rose to 5.7% from 5.4 in June, the largest print since World War II and significantly above expectations. Second, the July nationwide consumer price index was off 0.3% m/m and off 2.2% y/y with the core rate off 0.2% m/m and 2.2% y/y. The Tokyo-area August consumer price index was up +0.3% m/m and +0.1% y/y with the core component flat m/m and off 0.2% y/y. Other data saw July all household spending off 2.0% y/y while the trade surplus for the first ten days in August printed at ¥48.08 billion, off 69.2% y/y. The Nikkei 225 stock index climbed 0.57% to close at ¥10,534.14. U.S. dollar offers are cited around the ¥104.15 level. The euro moved higher vis-à-vis the yen as the single currency tested offers around the ¥135.00 figure and was supported around the ¥134.00 figure. The British pound moved higher vis-à-vis the yen as sterling tested offers around the ¥153.60 level while the Swiss franc moved higher vis-à-vis the yen and tested offers around the ¥88.90 level. In Chinese news, the U.S. dollar lost ground vis-à-vis the Chinese yuan as the greenback closed at CNY 6.8256 in the over-the-counter market, down from CNY 6.8273. Chinese Premier Wen this week said the markets need to avoid being “blindly optimistic” about the global economic recovery and added China must maintain its “moderately loose” monetary policy and “active” fiscal policy. PBoC has reported it will ensure “reasonable and ample” liquidity.
Technical Outlook at 1230 GMT (EDT + 0400)
(Bid Price) (Today’s Intraday Range)
EUR/ USD 1.4371 1.4388, 1.4324
USD/ JPY 93.60 94.06, 93.40
GBP/ USD 1.6305 1.6380, 1.6260
USD/ CHF 1.0561 1.0617, 1.0538
AUD/USD 0.8443 0.8469, 0.8375
USD/CAD 1.0831 1.0893, 1.0790
NZD/USD 0.6867 0.6892, 0.6840
EUR/ JPY 134.47 135.00, 134.03
EUR/ GBP 0.8813 0.8829, 0.8774
GBP/ JPY 152.54 153.61, 151.96
CHF/ JPY 88.58 88.91, 88.20
Support Resistance Support Resistance
EUR/ USD USD/ JPY
L1. 1.3780 1.4295 90.05 98.85
L2. 1.3605 1.4630 88.60 101.65
L3. 1.3400 1.5105 87.10 105.05
GBP/ USD USD/ CHF
L1. 1.5845 1.6495 1.0510 1.1165
L2. 1.5690 1.6740 1.0275 1.1270
L3. 1.5440 1.6830 0.9750 1.1555
AUD/ USD USD/ CAD
L1. 0.7715 0.8250 1.1340 1.1920
L2. 0.7440 0.8555 1.1130 1.2190
L3. 0.7165 0.9050 1.0725 1.2520
NZD/ USD EUR/ JPY
L1. 0.6190 0.6665 125.65 134.50
L2. 0.6020 0.6945 121.70 139.80
L3. 0.5655 0.7760 118.50 141.50
EUR/ GBP EUR/ CHF
L1. 0.8320 0.8770 1.4905 1.5380
L2. 0.7870 0.9080 1.4670 1.5580
L3. 0.7590 0.9355 1.4420 1.5880
GBP/ JPY CHF/ JPY
L1. 146.10 157.75 81.55 93.55
L2. 142.05 160.30 79.20 97.90
L3. 135.70 167.30 75.40 105.05
SCHEDULE
Wednesday, 26 August 2009
all times GMT
(last release in parentheses)
0030 Australia Q2 construction work done
0100 Australia August DEWR skilled vacancies (-1.7% m/m)
0500 Japan August small business confidence (41.1)
0800 Germany August Ifo business sentiment, expectations (90.4)
0800 Germany August Ifo, business climate (87.3)
0800 Germany August Ifo, current assessment (84.3)
1100 US MBA mortgage applications (5.6%)
1230 US July durable goods orders (-2.5%)
1230 US July durable goods orders, ex-transportation (1.1%)
1400 US July new home sales (384,000)
1400 US July new home sales (11.0% m/m
1600 France July total jobseekers
1600 US Federal Reserve Bank of Atlanta President Lockhart speaks
2245 NZ July trade balance
Thursday, 27 August 2009
all times GMT
(last release in parentheses)
N/A Eurozone August Ifo business climate survey
N/A Germany August consumer price index (0.0% m/m)
N/A Germany August consumer price index (-0.5% y/y)
N/A Germany August CPI, harmonized (-0.1% m/m)
N/A Germany August CPI, harmonized (-0.7% y/y)
0000 Australia June leading index (-0.1%)
0130 Australia Q2 private capital expenditure (-8.9%)
0610 Germany September GfK consumer confidence survey (3.5)
0800 Italy August PMI, retail (45.6)
0800 France August PMI, retail (46.0)
0800 Germany August PMI, retail (49.8)
0800 Eurozone August PMI, retail (47.3)
0800 Eurozone July M3 money supply (3.5% y/y)
0830 UK Q2 total business investment (-7.6% q/q)
0830 UK Q2 total business investment (-9.7% y/y)
1000 UK CBI quarterly distributive trades (-17)
1230 US Q2 gross domestic product, annualized (-1.0%0
1230 US Q2 personal consumption expenditure, core (2.0% q/q)
1230 US Q2 gross domestic product price index (0.2%)
1230 US Weekly initial jobless claims (576,000)
1230 US Continuing jobless claims (6.241 million)
2100 US Federal Reserve Bank of St. Louis President Bullard speaks
2245 NZ July building permits (-9.5% m/m)
2301 UK August GfK consumer confidence (-25)
2315 Japan August PMI, manufacturing (50.4)
2330 Japan July jobless rate (5.4%)
2330 Japan July household spending (0.2% y/y)
2330 Japan August Tokyo-area consumer price index (-1.8% y/y)
2330 Japan August Tokyo-area CPI, ex-food, energy (-1.1% y/y)
2330 Japan July national consumer price index (-1.8% y/y)
2330 Japan July national CPI, ex-food, energy (-0.7% y/y)
Friday, 28 August 2009
all times GMT
(last release in parentheses)
0300 NZ July M3 money supply (2.7% y/y)
0830 UK Q2 gross domestic product (-0.8% q/q)
0830 UK Q2 gross domestic product (-5.6% y/y)
0900 Italy July producer price index
0900 Eurozone August economic confidence (76.0)
0900 Eurozone August business climate indicator (-2.71)
0900 Eurozone August consumer confidence (-23)
0900 Eurozone August industrial confidence (-30)
0900 Eurozone August services confidence (-18)
0930 CH August KOF leading indicator (-0.99)
1230 US July personal income (-1.3%)
1230 US July personal spending (0.4%)
1230 US July CPE deflator (-0.4% y/y)
1230 US July CPE, core (0.2% m/m)
1230 US July PCE, core (1.5% y/y)
1230 Canada Q2 current account (-C$ 9.1 billion)
1230 Canada July industrial product prices (0.7% m/m)
1230 Canada July raw materials price index (6.2% m/m)
1400 US August University of Michigan consumer sentiment (63.2)
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