The euro moved higher vis-à-vis the U.S. dollar today as the single currency tested offers around the US$ 1.4365 level and was supported around the $1.4255 level. The European Central Bank convenes on Thursday and is not expected to change monetary policy at that meeting. The ECB today released a report that notes there is systemic risk in the credit default swaps market because the ten most active counterparties account for up to 72% of default swap exposure surveyed by lenders. Data released in the eurozone today saw the August consumer price index improve to -0.2% from July’s -0.7% decline. The decrease in disinflationary pressures suggests inflation may increase in the coming months. Recent economic activity in the eurozone has been on the upswing but there is a sizable chance the recent economic improvement could falter. French finance minister Lagarde was on the wire today saying the economies of the eurozone are stabilizing. In U.S. news, data released in the U.S. today saw the August Chicago PMI index print at 50.0, up from the prior reading of 43.4. Also, the New York NAPM activity improved for the first time in three months in August. Recent economic data in the U.S. have been on the upswing and dealers are interested to see if recent housing and and other economic data can continue the uptrend. Euro bids are cited around the US$ 1.3900 figure.
¥/ CNY
The yen appreciated vis-à-vis the U.S. dollar today as the greenback tested bids around the ¥92.55 level and was capped around the ¥93.55 level. As expected, the Democratic Party of Japan won a landslide victory in yesterday’s general election over the long-incumbent Liberal Democratic Party of Japan. The DJP won 308 seats in the lower house of parliament and the LDP’s representation fell to 119 from 300. Traders are carefully assessing the election results to determine how well the DPJ will be able to control spending and manage the government. There is widespread speculation the DPJ will attempt to inflate public spending through new Japanese government bond issuance, possibly increasing social spending. There is also skepticism that the yen’s post-electoral gains will be sustainable. Some believe former Ministry of Finance official “Mr Yen” Sakakibara will get a portfolio in the new government. Data released in Japan overnight saw July construction orders off 42.8% y/y to ¥660.9 billion while July overall housing starts were off 32.1% y/y to 65,974. Other data released tonight saw July wages decline 4.8% y/y while July overall retail sales were off 2.5% y/y. Additionally, July industrial output was up 1.9% m/m. The Nikkei 225 stock index lost 0.40% to close at ¥10,492.53. The euro moved lower vis-à-vis the yen as the single currency tested bids around the ¥132.15 level and was capped around the ¥133.85 level. The British pound moved lower vis-à-vis the yen as sterling tested bids around the ¥132.15 level while the Swiss franc moved lower vis-à-vis the yen and tested bids around the ¥87.20 level. In Chinese news, the U.S. dollar gained ground vis-à-vis the Chinese yuan as the greenback closed at CNY 6.8290 in the over-the-counter market, up from CNY 6.8256. Chinese equities were off more than 6% today and closed at levels not seen since May. It was reported that new yuan loans made by Chinese lenders in August were likely to fall below ¥300 billion from ¥356 billion in July and ¥1.53 trillion in June.
₤
The British pound moved higher vis-à-vis the U.S. dollar today as cable tested offers around the US$ 1.6300 figure and was supported around the $1.6180 level. Bank of England Monetary Policy Committee member Besley reported he sees economic growth returning by the end of the year during a period of “recuperation and recovery.” He added he sees “some sort of growth” in 2009 and 2010. Data released in the U.K. today saw August house prices rise 0.1% m/m, the first rise since July 2007, and were off 6.7% y/y. Cable bids are cited around the US$ 1.6030 level. The euro moved higher vis-à-vis the British pound as the single currency tested offers around the ₤0.8825 level and was supported around the ₤0.8775 level.
Technical Outlook at 1230 GMT (EDT + 0400)
(Bid Price) (Today’s Intraday Range)
EUR/ USD 1.4288 1.4315, 1.4255
USD/ JPY 92.94 93.55, 92.54
GBP/ USD 1.6225 1.6300, 1.6181
USD/ CHF 1.0614 1.0634, 1.0584
AUD/USD 0.8363 0.8441, 0.8338
USD/CAD 1.1055 1.1090, 1.0885
NZD/USD 0.6806 0.6855, 0.6791
EUR/ JPY 132.76 133.84, 132.13
EUR/ GBP 0.8803 0.8824, 0.8776
GBP/ JPY 150.80 152.16, 150.03
CHF/ JPY 87.49 88.23, 87.19
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
Sunday, 30 August 2009
all times GMT
(last release in parentheses)
2301 UK August Hometrack housing survey (0.0% m/m)
2301 UK August Hometrack housing survey (-7.7% y/y)
2315 Japan August PMI, manufacturing (50.4)
2350 Japan July industrial production (2.3% m/m)
2350 Japan July industrial production (-23.5% y/y)
2350 Japan July large retailers’ sales (-6.8%)
2350 Japan July retail trade (-0.2% m/m)
2350 Japan July retail trade (-2.9% y/y)
Monday, 31 August 2009
all times GMT
(last release in parentheses)
0030 Australia August TD Securities inflation (0.9% m/m)
0030 Australia August TD Securities inflation (1.9% y/y)
0100 Australia July new home sales (0.5% m/m)
0130 Australia Q2 inventories (-1.2%)
0130 Australia July private sector credit growth (0.1% m/m)
0130 Australia July private sector credit growth (3.4% y/y)
0130 Japan July labour cash earnings (-7.0% y/y)
0300 NZ August NBNZ business confidence (18.7)
0500 Japan July housing starts (-32.4% y/y)
0500 Japan July housing starts, annualized (749,000)
0500 Japan July construction orders (-28.0% y/y)
0530 Japan Bank of Japan Governor Shirakawa speaks
0800 Italy June retail sales
0900 Italy August consumer price index
0900 Eurozone August CPI, estimate (-0.7% y/y)
1230 Canada Q2 GDP, annualized (-5.4% q/q)
1230 Canada June GDP (-0.5% m/m)
1345 US August Chicago PMI (43.4)
2330 Australia August PMI, manufacturing (44.5)
Tuesday, 1 September 2009
all times GMT
(last release in parentheses)
0130 Australia Q2 current account balance (-A$ 4.614 billion)
0130 Australia July building approvals (9.3% m/m)
0130 Australia July building approvals (-14.3% y/y)
0430 Australia Reserve Bank of Australia interest rate decision
0545 CH Q2 gross domestic product (-0.80% q/q)
0545 CH Q2 gross domestic product (-2.4% y/y)
0730 Italy August business confidence
0730 Italy August services survey
0730 CH August PMI, manufacturing (44.3)
0745 Italy August PMI, manufacturing (45.4)
0750 France August PMI, manufacturing (50.2)
0755 Germany August PMI, manufacturing (49.0)
0755 Germany August unemployment, change (-6,000)
0755 Germany August unemployment (8.3%)
0800 Eurozone August PMI, manufacturing (47.9)
0830 UK July mortgage approvals (47,600)
0830 UK July net consumer credit (₤0.1 billion)
0830 UK July net lending secured on dwellings (₤0.3 billion)
0830 UK August PMI, manufacturing (50.8)
0830 UK July M4 money supply (1.0% m/m)
0830 UK July M4 money supply (13.6% y/y)
0900 Eurozone July unemployment rate (9.4%)
0900 Eurozone July producer price index (-6.6% y/y)
1400 US August ISM manufacturing (48.9)
1400 US August ISM, prices paid (55.0)
1400 US July pending home sales (3.6% m/m)
1400 US July pending home sales (9.2% y/y)
1400 US July construction spending (0.3% m/m)
2350 Japan August monetary base (6.1% y/y)
Wednesday, 2 September 2009
all times GMT
(last release in parentheses)
0130 Australia Q2 GDP growth (0.4% q/q)
0130 Australia Q2 GDP growth (0.4% y/y)
0830 UK August PMI, construction
0900 Eurozone Q2 gross domestic product (-0.1% q/q)
0900 Eurozone Q2 gross domestic product (-4.6% y/y)
0900 Eurozone July producer price index (0.3% m/m)
1100 US MBA mortgage applications (7.5%)
1130 US August Challenger job cuts (-5.7% y/y)
1215 US August ADP employment change (-371,000)
1230 US Q2 non-farm productivity (6.4%)
1230 US Q2 unit labour costs (-5.8%)
1400 US July factory orders (0.4%)
1800 US Federal Open Market Committee meeting minutes
2330 Australia August performance of services index (44.1)
Thursday, 3 September 2009
all times GMT
(last release in parentheses)
0130 Australia July trade balance (-A$ 441 million)
0300 NZ August ANZ commodity prices (1.0%)
0645 France Q2 ILO unemployment rate (9.1%)
0745 Italy August PMI, services (44.5)
0750 France August PMI, services (48.9)
0755 Germany August PMI, services (54.1)
0800 Eurozone August PMI, services (49.5)
0800 Eurozone August PMI, composite (50.0)
0830 UK August PMI, services (53.2)
0900 Eurozone July retail sales (-0.2% m/m)
0900 Eurozone July retail sales (-2.4% y/y)
1145 Eurozone European Central Bank interest rate decision
1230 US Weekly initial jobless claims (570,000)
1230 US Continuing jobless claims (6.133 million)
1400 US August ISM, non-manufacturing (46.4)
1500 US August ICSC chain store sales (-5.0% y/y)
2350 Japan Q2 capital spending (-25.3%)
Friday, 4 September 2009
all times GMT
(last release in parentheses)
0715 CH August consumer price index (-1.2% y/y)
0715 CH August consumer price index (-0.7% m/m)
0800 Italy June trade balance
0945 Eurozone European Commission economic forecasts
1100 Canada August net change in employment (-44,500)
1100 Canada August unemployment rate (8.6%)
1230 US August non-farm payrolls, net change (-247,000)
1230 US August unemployment rate (9.4%)
1230 US August average weekly hours (33.1)
1230 US August average hourly earnings (0.2% m/m)
1230 US August average hourly earnings (2.5% y/y)
1400 Canada August Ivey, PMI (51.8)
1600 US G20 central bankers and finance ministers meet
