BILLYT - DAILY FOREX COMMENTARY

Currency-Trading Reviews 6 Oct 2007

noreply@blogger.com (BillyT) — Fri, 05 Oct 2007 20:40:00 +0000

BillyT's Daily Forex Currency-Trading Reviews for 6 October 2007

EURO:

The euro moved higher vis-à-vis the U.S. dollar today as the single currency tested offers around the US$ 1.4155 level and was supported around the $1.4030 level. The common currency came off after the release of stronger-than-expected

U.S.

September non-farm payrolls that saw 110,000 new jobs created last month, consistent with expectations. There was a sizable upward revision to August's jobs tallies of 91,000 jobs and that temporarily pushed the greenback higher. The unemployment rate ticked up to 4.7% and average hourly earnings were up 0.4% in September. Average hourly earnings are now up 4.1% over the past year, the highest rate since February. Federal Reserve Vice Chairman Kohn today said the Federal Open Market Committee's interest rate cut last month was "a first approximation of what might be required to keep the economy on a sustainable growth path." Kohn added the 50bps reduction in the federal funds target rate "will not be able to avert all of the weakness in the economy but that may be in train for several months." He justified the 50bps cut saying "sluggish or inadequate easing risked a weaker real economy that might cause lenders to pull back even more." The German media reported the Federal Reserve "has resisted calls from other G7 nations for joint interventions such as selling euros." G7 officials will meet soon and dealers expect the communiqué will reference the disorderly nature of exchange rate markets and/ or call for exchange rates to move in accordance with economic fundamentals. Euro bids are cited around the US$ 1.4055 levels.

YEN:

The yen depreciated vis-à-vis the U.S. dollar today as the greenback tested offers around the ¥117.30 level and was supported around the ¥116.35 level. Technically, today's intraday low was right around the 38.2% retracement of the move from ¥124.15 to ¥111.60. The pair reached its highest level since 15 August as traders continue to increase their risk appetite. Data released in

Japan

saw the August index of leading economic indicators fall to 30.0 from 72.7 in July while the coincident index improved to 83.3 from 70.0 in July. Other data released today saw September foreign reserves climb US$ 13.44 billion from August to US$ 945.60 billion. The Nikkei 225 stock index lost 0.16% to close at ¥17,065.04. Dollar bids are cited around the ¥114.75 level. The euro moved higher vis-à-vis the yen as the single currency tested offers around the ¥165.10 level and was supported around the ¥164.20 level. The British pound and Swiss franc climbed higher vis-à-vis the yen as the crosses tested offers around the ¥238.30 and ¥99.20 levels, respectively.

BRITISH POUND:

The British pound gained ground vis-à-vis the U.S. dollar today as cable tested offers around the US$ 2.0440 level and was supported around the $2.0300 level. Technically, today's intraday low was right around the 23.6% retracement of the move from $1.9180 to $2.0655. Data released in the

U.K.

today saw median pay settlements down to 3.2% in the three months to September from 3.3% in the three months to August. Traders await the release of Tuesday's pre-Budget report by Chancellor Darling and the Comprehensive Spending Review. Many U.K.-watchers believe Prime Minister Brown will call a general election imminently. Cable bids are cited around the US$ 2.0270 level. The euro came off vis-à-vis the British pound as the single currency tested bids around the ₤0.6910 level and was capped around the ₤0.6940 level.

SWISS FRANC:

The Swiss depreciated vis-à-vis the U.S. dollar today as the greenback tested offers around the CHF 1.1855 level and was supported around the CHF 1.1740 level. Technically, today's intraday low was right around the 23.6% retracement of the move from CHF 1.2145 to CHF 1.1620l. Dollar offers are cited around the CHF 1.1885 level. The euro and British pound gained ground vis-à-vis the Swiss franc as the crosses tested offers around the CHF 1.6660 and CHF 2.4070 levels, respectively.

BillyT Daily Forex

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Currency-Trading Reviews 5 Oct 2007

noreply@blogger.com (BillyT) — Fri, 05 Oct 2007 20:39:00 +0000

BillyT's Daily Forex Currency-Trading Reviews for 5 October 2007

EURO:

U.S.

YEN:

Japan

BRITISH POUND:

U.K.

SWISS FRANC:

BillyT Daily Forex

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Currency-Trading Reviews 4 Oct 2007

noreply@blogger.com (BillyT) — Fri, 05 Oct 2007 01:46:00 +0000

BillyT's Daily Forex Currency-Trading Reviews for 4 October 2007

EURO:

The euro appreciated vis-à-vis the U.S. dollar today as the single currency tested offers around the US$ 1.4150 level and was supported around the $1.4065 level. As expected, the European Central Bank kept interest rates unchanged with the refinancing rate steady at 4.00%. ECB President Trichet reiterated price risks remain to the upside and noted money and credit growth remains vigorous but conspicuously dropped "accommodative" to characterize the ECB's current monetary policy stance. Moreover, Trichet noted there is growing uncertainty over eurozone growth prospects but predicted inflation will remain above 2.0% through early 2008. Trichet also referred to his remarks earlier in the week wherein he said

YEN:

The yen appreciated vis-à-vis the U.S. dollar today as the greenback tested bids around the ¥116.25 level and was capped around the ¥116.75 level. The pair retraced some of its recent gains and continues to orbit the ¥116.40 level, representing the 38.2% retracement of the move from ¥124.15 to ¥111.60. Bank of

BRITISH POUND:

The British pound gained ground vis-à-vis the U.S. dollar today as cable tested offers around the US$ 2.0425 level and was supported around the $2.0275 level. As expected, Bank of England's Monetary Policy Committee kept its headline repo rate unchanged at 5.75% and did not issue any policy statement. Minutes from today's MPC meeting will be released on 17 October and traders will closely scrutinize the minutes to determine if any policymakers voted to reduce interest rates. Data released in the

SWISS FRANC:

The Swiss appreciated vis-à-vis the U.S. dollar today as the greenback tested offers around the CHF 1.1815 level and was supported around the CHF 1.1735 level. Technically, today's intraday high was just below the 38.2% retracement of the move from CHF 1.2145 to CHF 1.1620. Dollar offers are cited around the CHF 1.1885 level. The euro and British pound came off vis-à-vis the Swiss franc as the crosses tested bids around the CHF 1.6595 and CHF 2.3900 levels, respectively.

BillyT Daily Forex

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Currency-Trading Reviews 3 Oct 2007

noreply@blogger.com (BillyT) — Wed, 03 Oct 2007 20:02:00 +0000

BillyT's Daily Forex Currency-Trading Reviews for 3 October 2007

EURO:

The euro weakened vis-à-vis the U.S. dollar today as the single currency tested bids around the US$ 1.4140 level and was capped around the $1.4200 figure. Traders do not expect the European Central Bank to change monetary policy tomorrow but will pay close attention to remarks from ECB President Trichet. Two key items that Trichet may comment on include the euro's recent appreciation and its implications for actual intervention versus the heightened verbal intervention that European officials have been brandishing lately. Also, traders want to know if the ECB's policy bias has shifted from hawkish closer to neutral on account of the recent turmoil in the financial markets. Any sense of hawkishness in Trichet's remarks could easily see a strong bid in the market for the euro. In U.S. news, the September non-manufacturing ISM business index fell to 54.8 from 55.8 in August. The new orders index fell back while the prices index for service posted strong growth to 66.1. The greenback was pressured after ADP's National Employment Report noted 58,000 private-sector jobs were added last month, up from a revised 27,000 in August. A significant amount of job losses were cited in the housing, construction, and financial services industries on account of the subprime mortgage meltdown in Q3. Similarly, the Challenger layoff report "pointed to a disturbing ramp up in financial services year-over-year layoffs." Many economists are focusing on new jobs growth around 100,000 when the September non-farm payrolls report is released on Friday. In eurozone news, EMU-13 August retail sales were up +0.1% m/m and +1.0% y/y, weaker-than-expected, while the EMU-13 September services PMI survey fell back to 54.2 from 58.0 in August. Euro bids are cited around the US$ 1.4120/ 1.4055 levels.

YEN:

The yen depreciated vis-à-vis the U.S. dollar today as the greenback tested offers around the ¥116.70 level and was supported around the ¥115.55 level. Stops were reached above the ¥116.55 level, representing the 50.0% retracement of the move from ¥109.00 to ¥124.15 as the greenback reached its strongest level since 27 August. Traders cited increasing risk appetite and a renewal of the short yen carry trade as two factors that led to intraday weakness in the yen. Traders await remarks from Bank of Japan Deputy Governor Iwata overnight. The Nikkei 225 stock index gained 0.90% to close at ¥17,199.89. Dollar bids are cited around the ¥114.80 level. The euro gained ground vis-à-vis the yen as the single currency tested offers around the ¥165.30 level and was supported around the ¥163.55 level. The British pound and Swiss franc gained ground vis-à-vis the yen as the crosses tested offers around the ¥237.80 and ¥235.85 levels, respectively. In Chinese news, traders are speculating the U.S. dollar could weaken soon and trade with a CNY 7.4 handle.

BRITISH POUND:

The British pound weakened vis-à-vis the U.S. dollar today as cable tested bids around the US$ 2.0340 level and was capped around the $ 2.0440 level. Sterling has moved lower for three consecutive days and traders are very curious to see how Bank of England Monetary Policy Committee's interest rate decision materializes tomorrow. The central bank took the rare step of not changing rates at their September meeting and releasing a statement regarding their decision. The MPC is faced with the task of balancing concerns about inflationary pressures against growing signs the housing market and overall economy are cooling. Most traders do not expect the MPC will reduce interest rates tomorrow but could move closer to a neutral bias. Data released in the U.K. today saw the September services PMI survey fall to 56.7, its lowest print since August 2006. Also, the BRC September shop price index was up 0.2% m/m and 0.4% y/y. The three-month sterling Libor interbank rate scaled back to 6.24% today from 6.26% yesterday while the overnight fixing rate remained steady at 5.81%. Cable bids are cited around the US$ 2.0270 level. The euro moved higher vis-à-vis the British pound as the single currency tested offers around the ₤0.6960 level and was supported around the ₤0.6930 level

SWISS FRANC:

The Swiss lost ground vis-à-vis the U.S. dollar today as the greenback tested offers around the CHF 1.1780 level and was supported around the CHF 1.1710 level. U.S. dollar offers are cited around the CHF 1.1825 level. The euro and British pound gained ground vis-à-vis the Swiss franc as the crosses tested offers around the CHF 1.6665 and CHF 2.4005 levels, respectively.

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Currency-Trading Reviews 2 Oct 2007

noreply@blogger.com (BillyT) — Tue, 02 Oct 2007 23:28:00 +0000

BillyT's Daily Forex Currency-Trading Reviews for 2 October 2007

EURO:

The euro weakened vis-à-vis the U.S. dollar today as the single currency tested bids around the US$ 1.4140 level and was capped around the $1.4235 level. Stops were hit below the $1.4170 level, representing the 23.6% retracement of the move from $1.3825 to $1.4280. European financial and monetary officials continue to jawbone over the common currency's relative strength and this verbal intervention is leading to a weaker currency. Spanish deputy finance minister Vegara today said "not all the necessary adjustment should come through the euro/ dollar exchange rate…There are important agents like the yen and yuan that should also have some of the responsibility of the adjustment of the so-called world financial imbalances." This verbal intervention follows similar comments from officials like Trichet and Juncker yesterday. Recent volatility in the markets up the chances that the upcoming Group of Seven finance ministers' meeting will include a statement about disorderly exchange rates, particularly as more European officials are intervening. Data released in the eurozone today saw EMU-13 August unemployment print at 6.9%, unchanged from July's level, while EMU-13 August PPI was up 0.1% m/m and 1.7% y/y. In U.S. news, Redbook retail sales were up +0.3% m/m in the first four weeks of September. Traders await the release of September non-farm payrolls data on Friday with most economists expecting about 100,000 new jobs were created. Some dealers believe the Federal Open Market Committee will reduce the federal funds target rate by 25bps at the end of October while others believe the FOMC will lower the federal funds target rate by 25bps or 50bps in December. Euro bids are cited around the US$ 1.4120/ 1.4055 levels.

YEN:

The yen depreciated vis-à-vis the U.S. dollar today as the greenback tested offers around the ¥115.90 level and was supported around the ¥115.25 level. Dollar bulls are eyeing the ¥116.35/55 levels as the pair's next upside target. The mixed Bank of Japan quarterly Tankan survey that was released yesterday did not help the yen's cause as there was little to change the view that the central bank is likely to leave the overnight call rate unchanged at +0.50% for the foreseeable future. Many traders believe the BoJ will not lift the target rate by +25bps to +0.75% before the end of the year. Japanese economic data as of late has been fairly strong but the changing political environment and international financial market turmoil are working against central bank officials who want to move rates higher now. Data released in Japan overnight saw the September monetary base up 0.7% y/y, the second consecutive monthly rise. The Nikkei 225 stock index climbed 1.19% to close at ¥17,046.78. Dollar bids are cited around the ¥114.55 level. The euro moved lower vis-à-vis the yen as the single currency tested bids around the ¥163.65 level and was capped around the ¥164.85 level. The British pound and Swiss franc came off vis-à-vis the yen as the crosses tested bids around the ¥234.90 and ¥98.30 levels, respectively. In Chinese news, traders continue to speculate People's Bank of China will tighten monetary policy at least one more time by the end of the year.

BRITISH POUND:

The British pound came off vis-à-vis the U.S. dollar today as cable tested bids around the US$ 2.0365 level and was capped around the $2.0445 level. Technically, the paid continues to orbit the $2.0415 level, representing the 76.4% retracement of the move from $2.0655 to $1.9650 level. Bank of England conducted a section auction of £10 billion to inject liquidity into the three-month interbank money market but failed to attract bids. The three-month sterling Libor rate fell to 6.26% from 6.28% yesterday. Traders are talking about media reports that U.K. banks are instead bidding on liquidity from the European Central Bank. It is being reported that U.K. banks bid on a "substantial part" of the €190 billion lent in the ECB's variable rate tender last week. Data released in the U.K. today saw September construction PMI fall to 60.3 from 64.8 in August. Cable bids are cited around the US$ 2.0270 level. The euro moved lower vis-à-vis the British pound as the single currency tested bids around the £0.6930 level and was capped around the £0.6970 level.

SWISS FRANC:

The Swiss lost ground vis-à-vis the U.S. dollar today as the greenback tested offers around the CHF 1.1775 level and was supported around the CHF 1.1675 level. Stops were reached above the CHF 1.1745 level, representing the 23.6% retracement of the move from CHF 1.2145 to CHF 1.1620. Credit Suisse lifted its 2007 GDP forecast to 2.5% from 2.2% and kept its 2008 GDP forecast unchanged at 1.9%. Similarly, the Swiss government raises its 2007 GDP forecast to 2.6% from 2.3. The Swiss government also reported that September CPI was up 0.1% m/m and 0.7% y/y. U.S. dollar offers are cited around the CHF 1.1825 level. The euro and British pound gained ground vis-à-vis the Swiss franc as the crosses tested offers around the CHF 1.6660 and CHF 2.4020 levels, respectively.

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Currency-Trading Reviews 1 Oct 2007

noreply@blogger.com (BillyT) — Tue, 02 Oct 2007 12:32:00 +0000

BillyT's Daily Forex Currency-Trading Reviews for 1 October 2007

EURO:

The euro weakened vis-à-vis the U.S. dollar today as the single currency tested bids around the US$ 1.4210 level and was capped around the $1.4280 level. The common currency reached another new lifetime high before paring some recent gains. The verbal intervention from eurozone officials grew louder over the weekend and today. European Central Bank President Trichet said the ECB notes with “extreme attention” that U.S. officials have reiterated the U.S.’s long-standing strong-dollar policy. Similarly, European Union Commissioner for Economic and Monetary Affairs Alumnia said he “looks forward to the next G7 statement,” implying officials may mention exchange rates in their communiqué. Also, the European Commission reported it is “concerned” about the euro’s strength while eurogroup chairman Juncker reported “The strong euro, as long as it stays on its path, tends to worry us a lot.” Data released in the eurozone saw final September final manufacturing PMI print at 53.2, unchanged from the previous estimate and its lowest showing since November 2005. Also, German September manufacturing PMI printed at 54.9. In U.S. news, the September ISM manufacturing activity index weakened to 52.0 from 52.9 in August and 53.8 in July. The prices paid index fell to 59.0 in September from 63.0 in August and the new orders, production, and inventories indices all decelerated. Traders are eyeing this Friday’s September non-farm payrolls report with many economists expecting about 100,000 jobs were added to the economy last month. Traders will also pay close attention to revisions for July’s and August’s non-farm payrolls tallies. Federal Reserve Chairman Greenspan spooked the markets by saying “Disinflationary pressures are gradually dissipating and inflationary pressures are beginning to mount.” Many traders believe the Federal Open Market Committee will reduce the federal funds target rate by 25bps at the end of the month while other traders see a 25bps or 50bps move lower in December. Euro bids are cited around the US$ 1.4120 level.

YEN:

The yen depreciated vis-à-vis the U.S. dollar today as the greenback tested offers around the ¥116.05 level and was supported around the ¥114.70 level. Technically, today’s intraday low was right around the 61.8% retracement of the move from ¥109.00 to ¥124.15. The quarterly Bank of Japan Tnkan survey that was released overnight saw confidence among large manufacturers remain flat for the second consecutive quarter in Q3 with the headline reading at +23. Companies are forecasting renewed weakness in Q4 and results for smaller manufacturers and non-manufacturers were not as strong as expected. Additionally, the combined capital expenditures plans in the “all-industries” category is expected to improve to 4.9% in the year to March 2008, above the 3.1% that was anticipated in the June Tankan survey. Most traders believe the Tankan data will not have a major impact on Bank of Japan’s monetary policymaking with most traders seeing less than a 50% chance the central bank will lift the overnight call rate by 25bps to +0.50% by the end of the year. Other data released in Japan overnight saw August average overall income rise +0.1% y/y in August, the first rise in nine months. The Nikkei 225 stock index climbed 0.36% to close at ¥16,845.96. Dollar bids are cited around the ¥114.55 level. The euro moved higher vis-à-vis the yen as the single currency tested offers around the ¥165.05 level and was supported around the ¥163.70 level. The British pound and Swiss franc gained ground vis-à-vis the yen as the crosses tested offers around the ¥236.95 and ¥99.30 levels, respectively. In Chinese news, China formally launched its state-owned foreign reserves investment company that will be responsible for managing about US$ 200 billion in foreign reserves. China recently announced its foreign reserves totaled US$ 1.4 trillion at the end of August.

BRITISH POUND:

The British pound came off vis-à-vis the U.S. dollar today as cable tested bids around the US$ 2.0375 level and was capped around the $2.0495 level. Sterling pared some of its recent gains following last week’s strong move higher. Many data were released in the U.K. today. First, August final M4 money supply was up an annualized 13.5%. Second, August consumer lending fell to ₤9.5 billion from ₤10.0 billion in July. Third, Hometrack reported U.K. September house prices were unchanged m/m for the second consecutive month and were up +5.0% y/y. Fourth, the U.K. September CIPS manufacturing PMI survey fell back to 55.1 from 55.7 in August. Fifth, Bank of England reported Q2 housing equity withdrawal fell back to ₤10.0 billion from a revised ₤13.1 billion in Q1. BoE also noted that the number of mortgage approvals fell to 109,000 in August from 115,000 in July and net mortgage lending fell to ₤8.5 billion from ₤8.9 billion during the same time frame. Liquidity conditions continue to improve in the U.K. money market sector as the three-month sterling Libor rate fell to 6.28% from 6.30% on Friday and the overnight fixing rate fell to 5.80% from 6.00% on Friday. Cable bids are cited around the US$ 2.0270 level. The euro moved lower vis-à-vis the British pound as the single currency tested bids around the ₤0.6945 level and was capped around the ₤0.6980 level.

SWISS FRANC:

The Swiss lost appreciated vis-à-vis the U.S. dollar today as the greenback tested bids around the CHF 1.1720 level and was supported around the CHF 1.1620 level. Data released in Switzerland today saw September PMI fall to 57.6 from 65.1 in August. U.S. dollar offers are cited around the CHF 1.1760 level. The euro and British pound moved higher vis-à-vis the Swiss franc as the crosses tested offers around the CHF 1.6665 and CHF 2.3970 level, respectively.

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Forex-Schedule 30 Sept til 5 Oct 2007

noreply@blogger.com (BillyT) — Mon, 01 Oct 2007 05:56:00 +0000

BillyT's Weekly Forex-Schedule from 30 September til 5 October 2007

SCHEDULE

Sunday, 30 September 2007

all times GMT

1430 Malta European Central Bank President Trichet speaks

2350 Japan Q3 Tankan large manufacturers’ index (23)

2350 Japan Q3 Tankan large manufacturers’ outlook (22)

2350 Japan Q3 Tankan non-manufacturing index (22)

2350 Japan Q3 Tankan non-manufacturing outlook (23)

2350 Japan Q3 Tankan large all-industry capital expenditures (7.7%)

Monday, 1 October 2007

all times GMT

0130 Japan August labour cash earnings (-1.7% y/y)

0130 Japan August overtime earnings (-0.1% y/y)

0630 Australia September Reserve Bank of Australia commodity index

0630 Eurozone European Central Bank President Trichet speaks

0730 CH September Purchasing Managers Index (65.1)

0755 Germany September PMI, manufacturing (56)

0800 Eurozone September PMI, manufacturing (53.2)

0830 UK August M4 money supply (1.2% m/m)

0830 UK August M4 money supply (13.5% y/y)

0830 UK August M4 sterling lending (₤23.0 billion)

0830 UK August net consumer credit (₤1.1 billion)

0830 UK August net lending secured on dwellings (₤9.2 billion)

0830 UK August mortgage approvals (115,000)

0830 UK September PMI, manufacturing (56.3)

0830 UK Q2 Bank of England housing equity withdrawal (₤13.2 billion)

1400 US September ISM, manufacturing (52.9)

1400 US September ISM, prices paid (63)

2330 Australia September AIG performance of manufacturing index (52.4)

2350 Japan September monetary base (0.7% y/y)

Tuesday, 2 October 2007

all times GMT

0545 CH October SECO 2007 economic forecasts

0545 CH September consumer price index (-0.1% m/m
0545 CH September consumer price index (0.4% y/y)

0830 UK September PMI, construction (64.8)

0900 Eurozone August producer price index (0.3% m/m)

0900 Eurozone August producer price index (1.8% y/y)

0900 Eurozone August unemployment rate (6.9%)

1400 US August pending home sales

1700 US Dallas Federal Reserve President Fisher speaks

2301 UK September Nationwide consumer confidence (94)

2330 Australia October Reserve Bank of Australia interest rate decision

Wednesday, 3 October 2007

all times GMT

N/A UK Bank of England Monetary Policy Committee interest rate meeting

0130 Australia August retail sales (0.9%)

0130 Australia August trade balance (-A$ 756 million)

0755 Germany September PMI, services (59.8)

0800 Eurozone September PMI, services (54)

0830 UK September PMI, services (57.6)

0900 Eurozone August retail sales (0.1% m/m)

0900 Eurozone August retail sales (0.5% y/y)

0930 UK September BRC shop price index

1100 US MBA mortgage applications (-2.8%)

1130 US September Challenger job cuts (21.7% y/y)

1215 US September ADP employment change (38,000)

1400 US September ISM, non-manufacturing (55.8)

2330 Australia September performance of service index (51.6)

2350 Japan Foreign net equities investment (-¥157.0 billion)

2350 Japan Foreign net bonds investment (-¥1.160 billion)

Thursday, 4 October 2007

all times GMT

0130 Australia August building approvals (0.4% m/m)

0130 Australia August building approvals (-7.5% y/y)

0210 Japan Bank of Japan Deputy Governor Iwata speaks

0300 NZ September ANZ commodity prices (1.4%)

0500 Japan Bank of Japan Deputy Governor Iwata speaks

1100 UK Bank of England interest rate announcement

1145 Eurozone European Central Bank interest rate announcement

1230 Eurozone European Central Bank President Trichet speaks

1230 US Weekly initial jobless claims (298,000)

1230 US Continuing jobless claims (2.551 million)

1230 Canada August building permits (-11.3% m/m)

1400 US August factory orders (3.7%)

1400 Canada September Ivey PMI (58.5)

1645 US Dallas Federal Reserve President Fisher speaks

1730 US Federal Reserve Governor Mishkin speaks

2350 Japan September official reserve assets (US$ 932.2 billion)

Friday, 5 October 2007

all times GMT

0500 Japan August leading economic index (72.7%)

0500 Japan August coincident index (70.0%)

1100 Canada September unemployment rate (6.0%)

1100 Canada September employment, net change (23,300)

1230 US September non-farm payrolls, net change (-4,000)

1230 US September unemployment rate (4.6%)

1230 US September average hourly earnings (0.3% m/m)

1230 US September average hourly earnings (3.9% y/y)

1230 US September average weekly hours (33.8)

1310 US Federal Reserve Governor Kohn speaks

1900 US August consumer credit (US$ 7.5 billion)

2300 US Federal Reserve Governor Warsh speaks

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WEEKLY MARKET RECAP for w/e 30 Sept 2007

noreply@blogger.com (BillyT) — Mon, 01 Oct 2007 05:53:00 +0000

BillyT's Forex Currency-Trading WEEKLY MARKET RECAP for w/e 30 Sept 2007

EURO:

The euro appreciated vis-à-vis the U.S. dollar last week as the single currency tested offers around the $1.4280 level and was supported around the $1.4060 level. The pair gained about 170 pips last week. HKMA’s Yam warned the U.S. dollar’s weakness could see Asian central banks’ reserves management strategies change. ECB’s Noyer said changes in the dollar’s value “could seriously hamper economic growth” and noted U.S. authorities continue their strong dollar policy. Fed funds futures are pricing is as much as a 90% chance the FOMC will take rates lower another 25bps next month. Weak business spending data could see U.S. Q3 growth print on the weak side. Philly Fed’s Plosser foresees slower growth over the coming quarters. ECB’s Trichet stressed the market turmoil has not resulted in the ECB shifting its growth or inflation forecasts. Traders now believe the FOMC easing cycle may be deeper and/ or longer than previously estimated.

ECB’s Garganas hawkishly noted “the upside risks to inflation dominate any effects stemming from the appreciation of the euro.” France’s Lagarde verbally intervened against the yuan.

Data released in the U.S. last week saw September consumer confidence fall to 99.8; August existing home sales were off 4.3% to an annualized 5.5 million units; Redbook retail sales were up +0.5% m/m in the first three weeks of September; the September Richmond Fed manufacturing index improved to +14 from +7 in August; August durable goods orders were off 4.9% with the ex-transportation component off 1.8%; Q2 GDP was downwardly revised to an annualized 3.8%; the Q2 overall PCE price index rose 4.3% with the core PCE price index upwardly revised to +1.4%; weekly initial jobless claims were off 15,000 to 298,000; continuing jobless claims were up 11,000 to 2.551 million; August building permits were upwardly revised to -4.8% from -5.9%; August new home sales were off 8.3% to 795,000; core personal consumption expenditures fell to 1.8% from 1.9%; August personal incomes were up 0.3%; August personal spending was up 0.6%; the final September University of Michigan consumer sentiment index was steady at 83.4; and the Chicago NAPM business index rose to 54.2 with the prices paid index falling sharply to 59.0.

Data released in the eurozone last week saw the Belgian National Bank September business confidence index fall to 1.5; EMU-13 July industrial orders were off 4.0% m/m and up 10.9% y/y; the German August import price index was off 0.7% m/m and 0.6% y/y; the GfK consumer climate index printed at 6.8 in October; the German unemployment rate fell to its lowest level since 1990 at 8.8%; EMU-13 money supply growth printed at 11.6%; the EMU-13 economic sentiment indicator fell to 107.1; provisional EMU-13 HICP rocketed to 2.1%; French GDP and PPI moved higher in August; and German retail sales were off 1.4% m/m and 2.2% y/y.

YEN:

The yen appreciated vis-à-vis the U.S. dollar last week as the greenback tested offers around the ¥114.00 figure and was capped around the ¥115.85 level. The pair lost about 80 pips last week. The Nikkei 225 stock index closed the week at ¥16,785.69. Yasuo Fukuda was named Japan’s new Prime Minister and is inserting moderates into key LDP slots. BoJ Policy Board minutes saw a consensus to lift rates “gradually.” Monday’s BoJ tankan survey will be closely watched, as will its capital expenditures data. BoJ’s Suda said the economy could overheat if the BoJ raises rates too slowly;

Data released in Japan last week saw August supermarket sales off 0.5% m/m; the August corporate services price index was off 0.5% m/m and up 1.0% y/y; the August trade surplus printed at ¥743.24 billion; the core CPI level was off 0.1% y/y; the August unemployment rate printed at 3.8%; August industrial production was up 3.4% m/m; August housing starts were off 43.3% y/y; August orders received by the 50 largest contractors were off 14.2% y/y; and August household spending was up 1.6% y/y.

CHINESE YUAN:

The Chinese yuan depreciated vis-à-vis the U.S. dollar last week as the greenback closed at CNY 7.5061 in the over-the-counter market, up from CNY 7.5036. China’s foreign reserves exceeded US$ 1.4 trillion at the end of the August. PBOC reported it will increase the flexibility of the yuan and keep it “basically stable.” PBOC also sees 2007 CPI growth at 4.6% with GDP growth around 11.6%.

Data released in China last week saw consumer confidence marginally improve in September; August consumer confidence improved to 97.3; and industrial firms’ profits were up 37% y/y between January and August.

BRITISH POUND:

The British pound appreciated vis-à-vis the U.S. dollar last week as cable tested offers around the US$ 2.0465 level and was supported around the $2.0885 level. The pair gained about 255 pips last week. PM Brown reiterated his support for BoE chief King. The Independent reported the bank deposit protection scheme has a mere ₤4.4 billion. BoE MPC’s Sentence warned demand and inflation could fall on account of markets turmoil. A BoE ₤10 billion auction for three-month liquidity failed to attract bids, suggesting a normalization in money markets. Sterling shrugged off more emergency buying from Northern Rock at the end of the week.

Data released in the U.K. last week saw public sector net borrowing print at ₤9.1 billion; Q2 business investment was revised to 0.4% from 0.8%; Q2 GDP was upwardly revised to 3.1% from 3.0%; CBI’s retail sales balance fell back to 12% of retailers reporting higher sales than one year ago; BBA August mortgage approvals dropped; Nationwide house prices were up in September; Q2 productivity growth receded to 2.7%; July service sector output was up 0.3% m/m; September GfK/ NOP consumer confidence fell to -7; Land Registry house prices were up in England and Wales; and the U.K.’s deficit fell to 2.5% of GDP in the fiscal year to April 2007.

SWISS FRANC:

The Swiss franc appreciated vis-à-vis the U.S. dollar last week as the greenback tested bids around the CHF 1.1625 level and was capped around the CHF 1.1755 level. The pair lost about 90 pips last week. SNB’s quarterly review confirmed its previous economic growth forecast of 2.5% for 2007 on robust growth in June, July, and August, citing staff shortages and high capacity utilization rates. KOF raised its Swiss 2007 GDP forecast to 2.8% from 2.4% and lowered its 2008 GDP forecast to 1.9%.

Data released in Switzerland last week saw the August private consumption index fall to 1.93 from 2.26 and the September KOF economic barometer rose to 2.14 from 2.12 in August.

CANADIAN DOLLAR:

The Canadian dollar appreciated vis-à-vis the U.S. dollar last week as the greenback tested bids around the C$ 0.9910 level and was capped around the C$ 1.0095 level. The pair lost about 70 pips last week. BoC boss Dodge noted the C$ and economy are now far above previous forecasts. Traders believe the loonie’s level may see the BoC keep rates unchanged at 4.50% on 16 October. Canada realized a C$ 13.8 billion budget surplus in the latest fiscal year.

Data released in Canada last week saw August industrial product prices off 0.1% m/m; the August raw materials price index was off 2.8% m/m; and July GDP was up 0.2% m/m.

AUSTRALIAN / NEW ZEALAND DOLLAR:

The Australian dollar appreciated vis-à-vis the U.S. dollar last week as the Aussie tested offers around the US$ 0.8885 level and was supported around the US$ 0.8610 level. The pair gained about 215 pips last week. RBA warned there could be “further bouts of market turbulence and strained liquidity conditions.”

Data released last week the September skilled vacancies index improve +0.1% m/m; August quarterly job vacancies were up 2.9% q/q; August private sector credit growth was up 1.5% m/m and 16.2% y/y; and the TD Securities-Melbourne Institute monthly inflation gauge was up 0.2% in September.

BillyT Daily Forex
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Currency-Trading Reviews 24 Sept 2007

noreply@blogger.com (BillyT) — Tue, 25 Sep 2007 02:15:00 +0000

BillyT's Daily Forex Currency-Trading Reviews for 24 September 2007

EURO:

The euro extended recent gains vis-à-vis the U.S. dollar today as the single currency tested offers around the US$ 1.4130 level and was supported around the $1.4085 level. The pair established a new lifetime high before consolidating some intraday gains. The move higher in the common currency was partially fueled by expectations the Federal Open Market Committee will reduce interest rates at least another 25bps before the end of the year. Traders await remarks from Federal Reserve Chairman Bernanke later in the North American session to see if he offers any additional clues about the Fed’s current thinking that were not detailed in the FOMC’s policy statement last week or in his subsequent Congressional testimony. Hong Kong Monetary Authority Chief Executive Joseph Yam warned that the U.S. dollar’s weakness may force Asian central banks to reassess their foreign exchange reserves management policies. Dallas Fed President Fisher indicated the Fed would have risked “unacceptably slow economic growth” if it didn’t cut rates last week and pledged the Fed is prepared to make a “further correction” towards growth or inflation. Data to be released in the U.S. this week include consumer confidence tomorrow and existing home sales. In eurozone news, the Belgian National Bank’s September business confidence index receded to 1.5 from 3.3 in August. Data to be released in the eurozone this week include the German Ifo business confidence index. Other data released today saw EMU-13 industrial orders fall 4.0% m/m in July and climb 10.9% y/y. Traders await comments on Wednesday from European Central Bank President Trichet to see if he offers any indication the ECB is prepared to lower interest rates before the end of the year. The other major question on traders’ minds is how the ECB will react to the relative strength of the euro. ECB member Noyer reported “Any abrupt changes in the dollar's value could seriously hamper economic growth. I regard it as extremely positive in this context that the US authorities are always sticking to and continue to stick to their strong dollar policy.” Euro bids are cited around the US$ 1.3990 level.

YEN:

The yen appreciated vis-à-vis the U.S. dollar today as the greenback tested bids around the ¥114.75 level and was capped around the ¥115.40 level. Technically, today’s intraday low was right around the 61.8% retracement of the move from ¥109.00 to ¥124.15. Traders are talking about the shakeup in the leadership of the Liberal Democratic Party as Yasuo Fukuda will be named the country’s new Prime Minister tomorrow and is expected to place moderates in key party posts. The big questions on traders’ minds is whether Fukuda will promote economic and financial reforms, whether his Ministry of Finance officials will do anything to hasten the unwinding of the short yen carry trade, and how his government will get along with Bank of Japan officials. The Nikkei 225 stock index lost 0.62% to close at ¥16,312.61. Dollar bids are cited around the ¥114.55 level. The euro came off vis-à-vis the yen as the single currency tested bids around the ¥161.80 level and was capped around the ¥162.65 level. The British pound and Swiss franc came off vis-à-vis the yen as the crosses tested bids around the ¥232.15 and ¥97.80 levels, respectively. The Chinese yuan depreciated vis-à-vis the U.S. dollar as the greenback closed at CNY 7.5106 in the over-the-counter market, down from CNY 7.5036. Merrill Lynch now estimates inflation will peak between 6.5% and 7.0% in the September to October period.

BRITISH POUND:

The British appreciated vis-à-vis the U.S. dollar today as cable tested offers around the US$ 2.0315 level and was supported around the $2.0195 level. Technically, today’s intraday high was just above the 23.6% retracement of the move from $1.9180 to $2.0655. Bank of England’s quarterly bulletin reported “A broad deterioration of conditions across credit markets was associated with increased volatility and impaired liquidity in global financial markets more generally in the review period.” Notably, the three-month sterling Libor market interest rate fell to 6.36% from 6.37% on Friday while the overnight rate rose to 5.80% from 5.75%. Data released in the U.K. today saw August public sector net borrowing print at ₤9.1 billion, the highest level since 1993 and a reflection of the credit market turmoil. Cable bids are cited around the US$ 2.0150 level. The euro slumped vis-à-vis the British pound as the single currency tested bids around the ₤0.6950 level and was capped around the ₤0.6975 level.

SWISS FRANC:

The Swiss franc came off marginally vis-à-vis the U.S. dollar today as the greenback tested offers around the CHF 1.1755 level and was supported around the CHF 1.1685 level. The August UBS consumption indicator will be released tomorrow. U.S. dollar offers are cited around the CHF 1.1880 level. The euro and British pound gained ground vis-à-vis the Swiss franc as the crosses tested offers around the CHF 1.6550 and CHF 2.3760 levels, respectively.

BillyT Daily Forex

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Forex-Schedule 24 Sept til 28 Sept 2007

noreply@blogger.com (BillyT) — Mon, 24 Sep 2007 01:30:00 +0000

BillyT Daily Forex

BillyT's Weekly Forex-Schedule from 24 September til 28 September 2007

SCHEDULE

Sunday, 23 September 2007

all times GMT

0130 Australia Reserve Bank of Australia Financial Stability Review

Monday, 24 September 2007

all times GMT

0830 UK August public sector net cash requirement (-₤13.1 billion)

0830 UK August public sector net borrowing (-₤6.5 billion)

0900 Eurozone July industrial new orders (4.4% m/m)

0900 Eurozone July industrial new orders (13.8% y/y)

1300 US Dallas Fed President Fisher speaks

1630 US Federal Reserve official Evans speaks

1700 US Federal Reserve Chairman Bernanke speaks

2350 Japan August Bank of Japan Policy Board meeting minutes

2350 Japan August corporate service price index (1.6% y/y)

Tuesday, 25 September 2007

all times GMT

0100 Australia Reserve Bank of Australia member Battellino speaks

0500 Japan August supermarket sales (-2.8% y/y)

0600 Germany August import price index (0.4% y/y)

0600 Germany August import price index (0.3% m/m)

0645 France August consumer spending

0645 France August housing starts

0645 France August housing permits

0730 Italy September consumer confidence index (106.5)

0800 CH August UBS consumption indicator (2.261)

0800 Italy July retail sales (0.7% y/y)

0800 Germany September Ifo, business climate (105.8)

0800 Germany September Ifo, current assessment (111.5)

0800 Germany September Ifo, expectations (100.4)

0830 UK Q2 total business investment (0.8% q/q)

0830 UK Q2 total business investment (7.4% y/y)

0900 Italy July trade balance

1300 NZ Q3 Westpac consumer confidence (111.4)

1400 US September consumer confidence (105)

1400 US September Richmond Fed manufacturing index (7)

1400 US August existing home sales (5.75 million)

1400 US August existing home sales (-0.2% m/m)

1430 Austria European Central Bank member Liebscher speaks

2130 US Philadelphia Fed President Plosser speaks

2245 NZ August trade balance (-NZ$ 791.0 million)

2350 Japan August merchandise trade balance, total (¥666.5 billion)

Wednesday, 26 September 2007

all times GMT

0000 Australia July leading index (0.4%0

0100 Australia September DEWR skilled vacancies (0.7% m/m)

0610 Germany October GfK consumer confidence (7.6)

0645 France September business confidence indicator (110)

0645 France September production outlook indicator (17)

0730 Italy September business confidence (94.2)

0800 Italy August hourly wages (0.1% m/m)

0800 Italy August hourly wages (1.8% y/y)

0830 UK Q2 GDP (0.8% q/q)

0830 UK Q2 GDP (3.0% y/y)

0830 UK Q2 current account (-₤12.2 billion)

0930 CH September KOF leading indicator (2.06)

1100 US MBA mortgage applications (2.4%)

1230 US St. Louis Fed President Poole speaks

1230 US August durable goods orders (5.9%)

1230 US August durable goods, ex-transportation (3.7%)

1510 Eurozone European Central Bank President Trichet speaks

2245 NZ August building permits (-15.5% m/m)

Thursday, 27 September 2007

all times GMT

0130 Australia August job vacancies (3.9%)

0210 Japan Bank of Japan Policy Board member Suda speaks

0300 NZ August M3 money supply (9.2% y/y)

0300 NZ September NBNZ business confidence (-33.8)

0500 Japan September small business confidence (47.5)

0600 Germany August ILO unemployment rate (6.2%)

0600 UK September Nationwide house prices (0.6% m/m)

0600 UK September Nationwide house prices (9.6% y/y)

0600 Germany August ILO unemployment (6.2%)

0755 Germany September unemployment change (-15,000)

0755 Germany September unemployment rate (9.0%)

0800 Germany September PMI, retail (53)

0800 France September PMI, retail (51.1)

0800 Eurozone September PMI, retail (51)

0800 Eurozone August M3 money supply (11.7% y/y)

0830 UK July index of services (0.8%)

0830 UK August BBA house purchase loans

1000 UK September distributive trades survey

1230 US Boston Fed President Rosengren speaks

1230 US Q2 GDP, annualized (4.0%)

1230 US Q2 price index (2.7%)

1230 US Q2 PCE, core (1.3% q/q)

1230 US Weekly initial jobless claims (311,000)

1230 US Continuing jobless claims (2.544 million)

1400 US August home sales (870,000)

1400 US August new home sales (2.8% m/m)

1530 Australia Reserve Bank of Australia member Lowe speaks

1700 France August unemployment rate (8.0%)

1700 France August unemployment change (0)

1700 US Federal Reserve Chairman Bernanke speaks

2130 US Federal Reserve Governor Mishkin speaks

2245 NZ Q2 GDP (1.0% q/q)

2245 NZ Q2 GDP (2.5% y/y)

2330 Japan August jobless rate (3.6%)

2330 Japan September PMI, manufacturing

2330 Japan August overall household spending (-0.1% y/y)

2330 Japan September Tokyo-area consumer price index (-0.2% y/y)

2330 Japan September Tokyo-area CPI, ex-food and energy (-0.2% y/y)

2330 Japan August CPI (0.0% y/y)

2330 Japan August CPI, ex-food and energy (-0.5% y/y)

2350 Japan August industrial production (-0.4% m/m)

2350 Japan August industrial production (3.2% y/y)

2350 Japan August large retailers’ sales (-2.5%)

2350 Japan August retail trade (-2.3% y/y)

2350 Japan August retail trade (-2.5% m/m)

2350 Japan Foreign net investment in equities and bonds

Friday, 28 September 2007

all times GMT

0030 Australia September TD Securities inflation (0.5% m/m)

0030 Australia September TD Securities inflation (2.9% y/y)

0130 Australia August private sector credit (0.9% m/m)

0130 Australia August private sector credit (15.4% y/y)

0500 Japan August housing starts (-23.4% y/y)

0500 Japan August annualized housing starts (947,000)

0500 Japan August construction orders (-10.4% y/y)

0600 Germany August retail sales (0.6% m/m)

0600 Germany August retail sales (-1.5% y/y)

0645 France Q2 GDP (0.3% q/q)

0645 France Q2 GDP (1.3% y/y)

0650 France August producer prices

0730 Italy European Central Bank member Bini Smaghi speaks

0800 Italy August producer price index (2.1% y/y)

0900 Eurozone September consumer price index (1.7% y/y)

0900 Eurozone September consumer confidence (-3)

0900 Eurozone September industrial confidence (5)

0900 Eurozone September economic confidence (110)

0900 Eurozone September services confidence (20)

0900 Eurozone September business climate indicator (1.41)

0930 UK September GfK consumer confidence (-4)

1230 US August personal spending (0.4%)

1230 US August personal income (0.5%)

1230 US August PCE deflator (2.1% y/y)

1230 US August PCE core (0.1% m/m)

1230 US August PCE core (1.9% y/y)

1230 Canada July GDP (0.2% m/m)

1230 Canada August industrial product prices (-0.7% m/m)

1230 Canada August raw materials price index (3.9% m/m)

1345 US September Chicago PMI (53.8)

1400 US Atlanta Fed President Lockhart speaks

1400 US August construction spending (-0.4% m/m)

1400 US University of Michigan consumer sentiment (83.8)

1415 US San Francisco Fed President Yellen speaks

1700 US St. Louis Fed President Poole speaks

1715 US Federal Reserve Governor Mishkin speaks

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WEEKLY MARKET RECAP for w/e 23 Sept 2007

noreply@blogger.com (BillyT) — Mon, 24 Sep 2007 01:28:00 +0000

BillyT Daily Forex

BillyT's Forex Currency-Trading WEEKLY MARKET RECAP for w/e 23 September 2007

EURO:

The euro appreciated vis-à-vis the U.S. dollar last week as the single currency tested offers around the $1.4120 level and was supported around the $1.3825 level. The pair gained about 210 pips last week. The common currency eclipsed the psychologically-important US$ 1.40 figure for the first time ever. The FOMC reduced the federal funds target rate by a surprise 50bps to 4.75% and lowered the discount rate by 50bps. The Fed cited the effect of “tightening credit conditions” on the housing market and economic growth. U.S. Treasury’s Paulson said the markets will continue to reprice risk “for a while” but added they are doing so against the backdrop “of a strong global economy.” Fannie Mae and Freddie Mac were given the capacity to invest US$ 20 billion in subprime mortgages. Rumours of a Saudi rial decoupling from the U.S. dollar has spread concern the region could reduce U.S. dollar holdings. Bernanke pledged regulators would limit mortgage fallout while Kohn said the Fed’s cuts were responsive to the decline in house prices and advocated an inflation target.

ECB’s Liebscher reiterated inflationary risks “are on the upside” and ECB’s Weber warned of inflationary pressures in Germany. ECB’s Bing Smaghi talked the euro down while ECB’s Constancio hinted rates could move lower.

Data released in the U.S. last week saw the September Empire State manufacturing index fall to 14.7; the August producer price index fell 1.4% m/m with core prices up 0.2%; August core PPI was up 2.2%; foreign demand for long-term U.S. securities fell to US$ 19.2 billion in July from a revised US$ 97.3 billion; total net foreign capital inflows were at US$ 103.8 billion from US$ 34.4 billion in June; August house foreclosure filings doubled y/y and were up 36% m/m; August headline CPI was off 0.1% with core CPI up 0.2%; core inflation is now up 2.1% over the past twelve months; August housing starts were off 2.6% to 1.331 million units; weekly initial jobless claims were off 9,000 to 311,000; continuing jobless claims were off 53,000 to 2.544 million; and the Philadelphia Fed manufacturing survey improved to 10.9.

Data released in the eurozone last week saw the EMU-13 July trade surplus printed at €4.6 billion from a revised €7.6 billion in June; the September ZEW economic expectations index fell sharply to -18.1 from -6.9 in August; German August PPI was up 0.1% m/m and 1.0% y/y; the Belgian National Bank’s September consumer confidence indicator was unchanged at +2; the flash EMU-13 September manufacturing PMI index fell to 53.2; the EMU-13 September services PMI fell to 54.0; and the EMU-13 current account surplus receded to €1.7 billion.

YEN:

The yen depreciated vis-à-vis the U.S. dollar last week as the greenback tested offers around the ¥116.35 level and was supported around the ¥114.00 figure. The pair gained about 5 pips last week. The Nikkei 225 stock index closed the week at ¥16,312.61. This Sunday’s LDP presidential election will pit Fukuda against Aso with the former seen as the front-runner to become Japan’s next Prime Minister. BoJ’s Policy Board kept the overnight call rate unchanged at 0.50% and Fukui weighed the “expansion of the Japanese economy” against global market turmoil. MoF’s Shinohara reported FX volatility “is still high.”

Data released in Japan last week saw the July tertiary index fall 0.5% m/m; August department store sales rise 1.4% y/y; the July leading index was upwardly revised to 72.7; the government’s large companies’ business sentiment diffusion index rebounded to +6.2 in Q3; and the July all-industries index was of 0.4% m/m and up 1.2% y/y.

Data released in China last week saw the Q3 entrepreneur confidence index recede to 77% from 83.4% in Q2.

CHINESE YUAN:

The Chinese yuan appreciated vis-à-vis the U.S. dollar last week as the greenback closed at CNY 7.5036 in the over-the-counter market, down from CNY 7.5175. Credit Suisse predicted China will tighten monetary policy further this year. The European Union said China’s FX reforms have not had any impact on the EUR/ CNY exchange rate. The government sees 2007 retail sales up 15%. PBOC reported household satisfaction with consumer prices is at a record low. PBOC chief Zhou said there is “no timetable” to make the yuan fully convertible.

BRITISH POUND:

The British pound appreciated vis-à-vis the U.S. dollar last week as cable tested offers around the US$ 2.0215 level and was supported around the $1.9880 level. The pair gained about 135 pips last week. Sterling was given earlier in the week as a result of panic withdrawals at home lender Northern Rock amid insolvency concerns. Bank of England provided billions in repo liquidity and guaranteed banking deposits across the industry to calm the Northern Rock stormy waters. CBI lowered its 2008 U.K. GDP forecast to 2.2% from 2.4%. BoE MPC meeting minutes saw a 9-to-0 vote to keep rates unchanged this month and many traders believe the BoE will lower rates this year. BoE’s King said existing legislation prevents the BoE from handling banking crises in a preferred manner. Liquidity conditions continued to normalize at the end of the week with three-month sterling Libor finished at 6.37%.

Data released in the U.K. last week saw the August headline CPI fall to 1.8%, its lowest rate since February 2005; August retail sales were up 0.6% m/m; CBI’s output balance was up +17%; the August provisional M4 money supply was up 13.5%; August mortgage lending fell to ₤32.2 billion; and IRS pay deals were steady at 3.5% in the three months to the end of August.

SWISS FRANC:

The Swiss franc appreciated vis-à-vis the U.S. dollar last week as the greenback tested bids around the CHF 1.1675 level and was capped around the CHF 1.1900 figure. The pair lost about 175 pips last week. SNB’s Roth suggested Swiss interest rates may have peaked.

Data released in Switzerland last week saw Q2 industrial production was up 6.7% q/q and 9.8% y/y; July retail sales were up 3.3% y/y; August producer and import prices were up 0.3% m/m and 2.7% y/y; the August trade surplus widened to CHF 637.1 million; and the economic expectations indicator fell to -26.7 in September.

CANADIAN DOLLAR:

The Canadian dollar appreciated vis-à-vis the U.S. dollar last week as the greenback tested bids around the C$ 0.9935 level and was capped around the C$ 1.0310 level. The pair lost about 295 pips last week. The pair reached parity for the first time since November 1976.

Data released in Canada last week saw foreigners buy a net C$ 1.5 billion in Canadian securities in July while Canadian investors reduced their investments in foreign securities to a net C$ 3.56 billion; August CPI was up 1.7% y/y; August leading indicators were up 0.3%; July wholesale sales were up 2.0% m/m; July wholesale inventories were up 0.6%; and July retail sales were off 0.8% m/m with the ex-autos component off 0.3%.

AUSTRALIAN / NEW ZEALAND DOLLAR:

The Australian dollar appreciated vis-à-vis the U.S. dollar last week as the Aussie tested offers around the US$ 0.8700 figure and was supported around the US$ 0.8275 level. The pair gained about 240 pips last week. RBA Governor Stevens called on banks to disclose their exposure to the U.S. subprime mortgage crisis more fully.

Data released last week saw the August merchandise imports rose to A$ 16.924 billion; the July leading economic index was up +4.6%; and August new home sales fell 8.6% m/m.

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Currency-Trading Reviews 21 Sept 2007

noreply@blogger.com (BillyT) — Fri, 21 Sep 2007 19:52:00 +0000

BillyT's Daily Forex Currency-Trading Reviews for 21 September 2007

EURO:

The euro extended recent gains vis-à-vis the U.S. dollar today as the single currency tested offers around the US$ 1.4120 level and was supported around the $1.4040 level. The common currency’s intraday high represented a fresh lifetime high for the pair. There was a dearth of economic data released in the U.S. today. Data released in the U.S. yesterday saw the Philadelphia Federal Reserve’s September manufacturing survey improve to 10.9. Fed Chairman Bernanke told Congress the current credit market crisis has created “significant market stress” and reiterated regulators would take steps to limit the effects from the mortgage crisis. Fed Vice Chairman Kohn today said the Fed formulates policy for the macroeconomy but added asset prices play a role in policymaking. Kohn said “"I doubt policy would have been eased this week if housing prices had continued their upward march” and surprisingly advocated inflation targeting. In eurozone news, the flash estimate for EMU-13 September manufacturing PMI fell to 53.2, its lowest level since November 2005, while the services PMI index weakened to 54.0, its lowest level since August 2005. Many traders believe these data will help tilt the European Central Bank’s policy bias from tightening to neutral or even expansionary. Also, it was reported that the eurozone’s current account surplus narrowed in July to €1.7 billion from €3.7 billion in June. ECB member Bini Smaghi verbally intervened against the euro’s rise today saying the ECB’s monetary policy must not take into account any particular exchange rate for the euro but added the ECB can decide to intervene to weaken the currency. ECB member Constancio reported “what happens in the U.S. economy will affect us,” a hint the ECB’s policy bias is likely to change. Constancio added “have no forex target, but the level of the euro is important due to its effects on inflation.” Euro bids are cited around the US$ 1.3970 level.

YEN:

The yen depreciated vis-à-vis the U.S. dollar today as the greenback tested offers around the ¥115.85 level and was supported around the ¥114.55 level. Technically, today’s intraday low was right around the 23.6% retracement of the move from ¥124.15 to ¥111.60. The yen has been quite volatile lately, torn between dollar bulls who believe Bank of Japan will not raise interest rates by the end of the year and yen bulls who are unwinding their short yen carry trades. Ministry of Finance official Shinohara spoke overnight and said “Foreign exchange volatility has fallen a little compared with some time ago, but it is still at high levels.” Data released in Japan overnight saw the July all-industries index off 0.4% m/m and up 1.2% y/y. Also, capital flows reported Japanese accounts sold a net ¥449.6 billion in foreign bonds last week while foreign investors were net sellers of Japanese equities for the second consecutive week last week. The Nikkei 225 stock index lost 0.62% to close at ¥16,312.61. Dollar bids are cited around the ¥114.55 level. The euro moved higher vis-à-vis the yen as the single currency tested offers around the ¥162.80 level and was supported around the ¥161.10 level. The British pound and Swiss franc gained ground vis-à-vis the yen as the crosses tested offers around the ¥233.50 and ¥98.50 levels, respectively. The Chinese yuan appreciated vis-à-vis the U.S. dollar as the greenback closed at CNY 7.5036 in the over-the-counter market, down from CNY 7.5144 and the pair’s weakest close since the yuan revaluation of July 2005. People’s Bank of China Governor Zhou reported China “does not have a timetable” for making the yuan fully convertible on China’s capital account.

BRITISH POUND:

The British appreciated sharply vis-à-vis the U.S. dollar today as cable tested offers around the US$ 2.0195 level and was supported around the $2.0075 level. Technically, today’s intraday low was right around the 38.2% retracement of the move from $1.9180 to $2.0655. Liquidity conditions continued to normalize in the U.K. money markets today as the three-month sterling Libor rate fell to 6.37% from 6.39%. Traders will pay close attention to the banking system to see if a buyer emerges for troubled Northern Rock PLC. A buyout of that financial institution could lead to more sterling strength as it would imply less panicked withdrawals from the banking system. Data released in the U.K. today saw IRS pay deals remain steady at 3.5% in the three months to the end of August. Cable bids are cited around the US$ 2.0035 level. The euro came off vis-à-vis the British pound as the single currency tested bids around the ₤0.6965 level and was capped around the ₤0.7020 level.

SWISS FRANC:

The Swiss franc came off marginally vis-à-vis the U.S. dollar today as the greenback tested offers around the CHF 1.1770 level and was supported around the CHF 1.1675 level. Today’s intraday low represents the pair’s weakest showing since March 2005. Traders are debating whether or not Swiss National Bank will tighten monetary policy in December or if official Swiss interest rates have peaked. U.S. dollar offers are cited around the CHF 1.1880 level. The euro and British pound moved higher vis-à-vis the Swiss franc as the crosses tested offers around the CHF 1.6535 and CHF 2.3725 levels, respectively.

AUSTRALIAN / NEW ZEALAND DOLLAR:

The Australian dollar moved higher vis-à-vis the U.S. dollar today as the Aussie tested offers around the US$ 0.8700 figure and was supported around the $0.8605 level. Technically, today’s intraday high represents the pair’s strongest showing since 27 July. Australian dollar bids are cited around the US$ 0.8585 level. The New Zealand dollar climbed higher vis-à-vis the U.S. dollar as the kiwi tested offers around the US$ 0.7465 level and was supported around the $0.7365 level. New Zealand dollar bids are cited around the US$ 0.7275 level.

CANADIAN DOLLAR:

The Canadian dollar appreciated vis-à-vis the U.S. dollar today as the greenback tested bids around the C$ 0.9935 level and was capped around the C$ 1.0055 level. The loonie extended recent multi-decade gains, establishing a new fresh high dating back to November 1976. Data released in Canada today saw July retail sales fell 0.8% m/m with the ex-autos component off 0.3%. U.S. dollar offers are cited around the C$ 1.0090 level.

BillyT Daily Forex

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Currency-Trading Reviews 20 Sept 2007

noreply@blogger.com (BillyT) — Thu, 20 Sep 2007 20:40:00 +0000

BillyT's Daily Forex Currency-Trading Reviews for 20 September 2007

EURO:

The euro appreciated vis-à-vis the U.S. dollar today as the single currency tested offers around the US$ 1.4070 level and was supported around the $1.3955. The common currency rocketed to a new lifetime high above the psychologically-important $1.4000 figure on speculation that Saudi Arabia is ending its ending the peg between the rial and the U.S. dollar. Notably, the Saudi Arabian Monetary Agency did not reduce interest rates this week when the Federal Reserve took the federal funds target rate lower by 50bps. Traders believe this may set off a firestorm in the Middle East and could see other oil-rich countries decouple their currencies from the U.S. dollar and ignite more selling pressure. Data released in the U.S. today saw weekly initial jobless claims fall 9,000 to 311,000 while continuing jobless claims were off 53,000 to 2.544 million. Traders are paying close attention to testimony from Federal Reserve Chairman Bernanke and U.S. Treasury Secretary Paulson about the U.S. mortgage industry today. The September Philadelphia Fed survey will be released later in the North American session. In eurozone news, the Belgian National Bank’s September consumer confidence indicator was unchanged at -2. Euro bids are cited around the US$ 1.3950 level.

YEN:

The yen appreciated vis-à-vis the U.S. dollar today as the greenback tested bids around the ¥114.90 level and was capped around the ¥116.10 level. The U.S. dollar crumbled across the board and the New York Board of Trade’s U.S. Dollar Index plunged to its lowest level since September 2002 and is now trading with a 78 handle. Data released in Japan overnight the saw large companies’ business sentiment diffusion index rebound to +6.2 in Q3 from -0.9 in Q2. This is the government’s index and not the Bank of Japan’s tankan survey but it nonetheless represents an improvement in sentiment. The yen posted gains on many of its crosses too and this partially reflects the fact that the Federal Reserve’s rate cut is likely to see other central banks move from a tightening bias to a neutral or easing bias, thus leading to more unwinding of the short yen carry trade. The Nikkei 225 stock index climbed 0.20% to close at ¥16,413.79. Dollar bids are cited around the ¥113.70 level. The euro came off vis-à-vis the yen as the single currency tested bids around the ¥161.35 level and was capped around the ¥162.40 level. The British pound and Swiss franc moved lower vis-à-vis the yen as the crosses tested bids around the ¥230.70 and ¥97.90 levels, respectively. The Chinese yuan lost marginal ground vis-à-vis the U.S. dollar as the greenback closed at CNY 7.5144 in the over-the-counter market, up from CNY 7.5135. Data released in China saw the Q3 bank industry prosperity index hit a record high at 70.6% while the Q3 entrepreneur confidence index receded to 77% from 83.4% in Q2. People’s Bank of China reported that household satisfaction with consumer prices is at a record low.

BRITISH POUND:

The British appreciated sharply vis-à-vis the U.S. dollar today as cable tested offers around the US$ 2.0135 level and was supported around the $1.9970 level. Sterling recouped some recent losses after testimony from Bank of England Governor King quelled speculation that he would be ousted in response to the central bank’s delayed response to the global liquidity crisis and its impact on the U.K. banking sector. King made it clear the BoE does not intend to provide a complete bail-out to the U.K. money market. King also reported that existing legislation such as the Market Abuses Directive reduces his “preferred” measure of finding a “covert lender of last resort” for troubled financial institutions such as Northern Rock PLC. Liquidity conditions improved marginally in the U.K. money market today with the three-month sterling Libor rate falling to 6.39% from 6.55 and the overnight and one-week rates down 7bps and 15bps, respectively. BoE yesterday announced it will offer ₤10 billion to the interbank market via next week’s three-week repurchase agreement. Bank of England Monetary Policy Committee member Barker today reported the U.K. housing market “remains relatively robust.” Data released in the U.K. today saw August retail sales rise 0.6% m/m while the CBI’s revealed a positive output balance level of +17%, up from +13% in July. Also, August provisional annual M4 money supply growth rose to 13.5% from 13.0% in July while August gross mortgage lending fell to ₤32.2 billion from ₤34.1 billion in July. Cable bids are cited around the US$ 1.9920 level. The euro moved higher vis-à-vis the British pound as the single currency tested offers around the ₤0.7005 level and was supported around the ₤0.6975 level.

SWISS FRANC:

The Swiss franc appreciated vis-à-vis the U.S. dollar today as the greenback tested bids around the CHF 1.1695 level and was capped around the CHF 1.1845 level. The pair reached its lowest level since March 2005. Data released in Switzerland today saw August producer and import prices expand more than expected, up 0.3% m/m and 2.7% y/y. The August trade surplus widened to CHF 637.1 million and the indicator for economic expectations indicator fell 21.6 points to -26.7 in September. U.S. dollar offers are cited around the CHF 1.1880 level. The euro and British pound weakened vis-à-vis the Swiss franc as the crosses tested bids around the CHF 1.6445 and CHF 2.3505 levels, respectively.

AUSTRALIAN / NEW ZEALAND DOLLAR:

The Australian dollar moved higher vis-à-vis the U.S. dollar today as the Aussie tested offers around the US$ 0.8660 level and was supported around the $0.8550 level. The pair reached its highest level since 27 July. Data released in Australia today saw August new home sales fall 8.6% m/m, the lowest level since January. Australian dollar bids are cited around the US$ 0.8430 level. The New Zealand dollar gained ground vis-à-vis the U.S. dollar as the kiwi tested offers around the US$ 0.7450 level and was supported around the $0.7325 level. Data released in New Zealand today saw the annual current account deficit expand slightly in Q2. New Zealand dollar bids are cited around the US$ 0.7275 level.

CANADIAN DOLLAR:

The Canadian dollar appreciated sharply vis-à-vis the U.S. dollar today as the greenback tested bids around the C$ 0.9995 level and was capped around the C$ 1.0155 level. The last time the pair reached parity prior to today was November 1976. Data released in Canada saw July wholesale sales rose 2.0% m/m while wholesale inventories were up 0.6%. U.S. dollar offers are cited around the C$ 1.0155 level.

BillyT Daily Forex
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BillyT's Daily Forex Currency-Trading Reviews for 19 September 2007

noreply@blogger.com (BillyT) — Thu, 20 Sep 2007 01:08:00 +0000

BillyT's Daily Forex Currency-Trading Reviews for 19 September 2007

EURO:

The euro came off vis-à-vis the U.S. dollar today as the single currency tested bids around the US$ 1.3935 level and was capped around the $1.3985 level. Today’s range was limited following yesterday’s significant move higher that saw the common currency establish a new lifetime high and come within fifteen pips of testing the psychologically-important US$ 1.4000 figure. The impetus for the pair’s gains yesterday was a larger-than-expected interest rate reduction by the Federal Open Market Committee that saw the federal funds target rate lowered by 50bps to 4.75%. Most traders expected the FOMC to reduce rates by 25bps and many Fed-watchers are already anticipating policymakers will lower rates another 25bps this year. The FOMC reported “Economic growth was moderate during the first half of the year, but the tightening of credit conditions has the potential to intensify the housing correction and to restrain economic growth more generally. Today’s action is intended to help forestall some of the adverse effects on the broader economy that might otherwise arise from the disruptions in financial markets and to promote moderate growth over time. Readings on core inflation have improved modestly this year. However, the Committee judges that some inflation risks remain, and it will continue to monitor inflation developments carefully. Developments in financial markets since the Committee’s last regular meeting have increased the uncertainty surrounding the economic outlook. The Committee will continue to assess the effects of these and other developments on economic prospects and will act as needed to foster price stability and sustainable economic growth.” Equity markets reacted very positively to the Fed’s decision that also included a 50bps reduction in the discount rate. The Fed is clearly concerned about the impact of the subprime mortgage market crisis on the U.S. housing sector. Data released in the U.S. today saw August headline consumer price inflation off 0.1%, the first negative reading since October 2006. Core CPI prices were up 0.2% last month and core inflation is now up 2.1% over the past twelve months. These data are consistent with the Fed’s assessment that inflation is moderating. Other data released today saw August housing starts off 2.6% to 1.331 million units while permits for future construction were at their lowest levels in more than one decade. U.S. federal housing regulators provided the housing market with a little bit of a boost today in granting Fannie Mae and Freddie Mac with the capacity to invest US$ 20 billion in subprime mortgages. In eurozone news, the German government warned a weaker dollar could negatively impact German exports. Data released in Germany saw the August producer price index up 0.1% m/m and 1.0% y/y. Euro bids are cited around the US$ 1.3620 level.

YEN:

The yen depreciated vis-à-vis the U.S. dollar today as the greenback tested offers around the ¥116.30 level and was supported around the ¥115.65 level. Technically, today’s intraday high was right around the 38.2% retracement of the move from ¥122.15 to ¥111.60. As expected, Bank of Japan’s Policy Board voted 8-to-1 to keep the overnight call rate unchanged at +0.50%. The central bank also kept its economic assessment of the economy unchanged and most traders believe the BoJ may be forced to keep the overnight call rate unchanged through the end of 2007. BoJ Governor Fukui said instability in global financial markets and downside risks surrounding the U.S. economy countered “the steady expansion of the Japanese economy.” Data released in Japan overnight saw August department store sales rise 1.4% y/y while the July leading index was upwardly revised to 72.7. The Nikkei 225 stock index gained 3.67% to close at ¥16,381.54. Dollar bids are cited around the ¥113.70 level. The euro came off vis-à-vis the yen as the single currency tested bids around the ¥161.35 level and was capped around the ¥162.45 level. The British pound and Swiss franc weakened vis-à-vis the yen as the crosses tested bids around the ¥231.10 and ¥97.80 levels, respectively. The Chinese yuan appreciated vis-à-vis the U.S. dollar as the greenback closed at CNY 7.5135 in the over-the-counter market, down from CNY 7.5228 – the pair’s weakest closing price since the revaluation in July 2005. The government now estimates 2007 retail sales will print around CNY 8.8 trillion, up 15%

BRITISH POUND:

The British extended recent losses vis-à-vis the U.S. dollar today as cable tested bids around the US$ 1.9950 level and was capped around the $2.0170 level. Technically, today’s intraday high was just above the 50% retracement of the move from $2.0655 to $1.9650. Minutes from Bank of England Monetary Policy Committee’s September interest rate meeting were released today and evidenced a 9-to-0 vote to keep rates unchanged on account of turmoil in the credit market. The MPC also concluded the upside balance of risk to inflation it identified last month “had probably receded.” Bank of England today announced it will avail the support it has provided over the past week to Northern Rock PLC to other financial institutions. The central bank is trying bring the sterling money markets under control where the premium for short-term liquidity remains 100bps above the central bank’s repo rate target of 5.75%. Most traders now believe the BoE will be forced to reduce interest rates over the coming months. Cable bids are cited around the US$ 1.9805 level. The euro moved higher vis-à-vis the British pound as the single currency tested offers around the ₤0.6995 level and was supported around the ₤0.6930 level.

SWISS FRANC:

The Swiss franc depreciated vis-à-vis the U.S. dollar today as the greenback tested offers around the CHF 1.1875 level and was supported around the CHF 1.1790 level. The pair reached its lowest level since April 2005 before being bid higher today. Data released in Switzerland today saw July retail sales rise 3.3% y/y, above expectations. Dollar offers are cited around the CHF 1.1960 level. The euro moved higher vis-à-vis the Swiss franc as the single currency tested offers around the CHF 1.6560 level while the British pound came off vis-à-vis the Swiss franc and tested bids around the CHF 2.3590 level.

BillyT Daily Forex
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BillyT's Daily Forex Currency-Trading Reviews for 18 September 2007

noreply@blogger.com (BillyT) — Tue, 18 Sep 2007 20:37:00 +0000

BillyT's Daily Forex Currency-Trading Reviews for 18 September 2007

EURO:

The euro appreciated vis-à-vis the U.S. dollar today as the single currency tested offers around the US$ 1.3890 level and was supported around the $1.3825 level. Traders awaited the Federal Open Market Committee’s interest rate decision later in the North American session with most expecting a 25bps monetary expansion. A sizable minority, however, continue to call for a 50bps reduction in the federal funds target rate to provide the financial markets with some additional liquidity in the wake of the ongoing credit market shakeout. A 25bps cut would take the federal funds target rate lower to 5.00% and many traders also believe the Fed will again lower the discount rate to make it less expensive for financial institutions to borrow funds. As always, the Fed’s policy statement will be scrutinized closely to try and decipher policymakers’ policy bias and policy actions in the future. The big question on traders’ minds is whether or not the FOMC will need to lower interest rates again after today or if this will represent a one-time reduction in the federal funds target rate. Data released in the U.S. today saw the August producer price index fall 1.4% m/m, the sharpest decline since October 2006, while core prices were up 0.2%. Over the past year, core prices have been up 2.2%, consistent with expectations. Other data released in the U.S. saw foreign demand for long-term U.S. securities decline sharply in July to US$ 19.2 billion from a revised US$ 97.3 billion in June and well below expectations. These data evidence waning foreign demand for long-term U.S. assets during early in Q3. The decline was partially offset by demand for short-term assets as total net foreign capital inflows printed at US$ 103.8 billion, up from US$ 34.4 billion in June. Other U.S. data saw the number of U.S. house foreclosure filings double in August from one year ago and up 36% m/m, the latest indication of the impact the subprime mortgage crisis is having on homeowners. In eurozone news, European Central Bank member Weber expressed “some concern” with the development of oil and food prices in Germany. Data released in Germany today saw the September ZEW economic expectations index fall sharply to -18.1 from -6.9 in August, more-than-expected. Euro bids are cited around the US$ 1.3620 level.

YEN:

The yen depreciated vis-à-vis the U.S. dollar today as the greenback tested offers around the ¥115.85 level and was supported around the ¥114.80 level. Technically, today’s intraday low was right around the 61.8% retracement of the move from ¥109.00 to ¥124.15. The pair reached its highest level since 5 September on growing expectations that Bank of Japan will not raise the overnight call rate this year from its current +0.50% level. Nikkei reported the U.S. subprime mortgage shakeout and political instability in Japan may limit the central bank’s ability to push rates higher over the next few months. BoJ’s Policy Board will announce its latest interest rate decision tomorrow. Traders await the outcome of this Sunday’s LDP presidential election to determine who the next Prime Minister of Japan will be with most Japan-watchers anticipating Fukuda will assume the top slot. Data released in Japan saw the July tertiary index fall 0.5% m/m, the third decline in seven months. The Nikkei 225 stock index lost 2.02% to close at ¥15,801.80. Dollar bids are cited around the ¥113.70 level. The euro moved higher vis-à-vis the yen as the single currency tested offers around the ¥160.85 level and was supported around the ¥158.80 level. The British pound and Swiss franc moved higher vis-à-vis the yen as the crosses tested offers around the ¥231.55 and ¥97.55 levels, respectively. The Chinese yuan weakened marginally vis-à-vis the U.S. dollar as the greenback closed at CNY 7.5228 in the over-the-counter market, up from CNY 7.5227. Credit Suisse predicted China is likely to tighten monetary policy further this year. The European Union criticized China’s foreign exchange reforms noting they have had “no impact” on the yuan’s exchange rate vis-à-vis the euro.

BRITISH POUND:

The British gained ground vis-à-vis the U.S. dollar today as cable tested offers around the US$ 1.9995 level and was supported around the $1.9880 level. Technically, today’s intraday low was right around the 23.6% retracement of the move from $2.0655 to $1.9650. Data released in the U.K. today saw the August headline consumer price index fall to 1.8%, the lowest rate since February 2005. Notably, this means CPI is below the level Bank of England expected it would be when it released its quarterly inflation report one month ago. Sterling was bid on news the U.K. government has provided a blanket guarantee on all bank deposits following the continuation of panicked withdrawals from U.K. home lender Northern Rock. Bank of England provided financial institutions with ₤4.4 billion in reserves to contend with short-term liquidity issues via a two-day repo. Many dealers now believe the central bank will be forced to lower interest rates in the near future. CBI reduced its 2008 GDP forecast for the U.K. to 2.2% from 2.4%. Cable bids are cited around the US$ 1.9805 level. The euro moved lower vis-à-vis the British pound as the single currency tested bids around the ₤0.6940 level and was capped around the ₤0.6975 level.

SWISS FRANC:

The Swiss franc depreciated vis-à-vis the U.S. dollar today as the greenback tested offers around the CHF 1.1890 level and was supported around the CHF 1.1855 level. Technically, today’s intraday high was right around the 23.6% retracement of the move from CHF 1.1800 to CHF 1.1920. Data released in Switzerland today saw Q2 industrial production up 6.7% q/q and 9.8% y/y. Swiss National Bank President Roth spoke yesterday and intimated interest rates may have peaked. Dollar offers are cited around the CHF 1.1960 level. The euro and British pound appreciated vis-à-vis the Swiss franc as the crosses tested offers around the CHF 1.6490 and CHF 2.3745 levels, respectively.

AUSTRALIAN / NEW ZEALAND DOLLAR:

The Australian dollar gained ground vis-à-vis the U.S. dollar today as the Aussie tested offers around the US$ 0.8375 level and was supported around the $0.8275 level. Technically, today’s intraday low was right around the 50% retracement of the move from $0.8870 to $0.7675. Data released in Australia today saw August merchandise imports rise to A$ 16.924 billion from A$ 15.247 billion in July. Reserve Bank of Australia Governor Stevens called on Australian banks to disclose their exposures to the U.S. subprime mortgage crisis more fully. Australian dollar bids are cited around the US$ 0.8160 level. The New Zealand dollar moved higher vis-à-vis the U.S. dollar as the kiwi tested offers around the US$ 0.7095 level and was supported around the $0.7005 level. New Zealand dollar bids are cited around the $0.6985 level.

CANADIAN DOLLAR:

The Canadian dollar extended recent gains vis-à-vis the U.S. dollar today as the greenback tested bids around the C$ 1.2000 figure and was capped around the C$ 1.0285 level. The pair reached its lowest level in a couple of decades and many traders are now talking about parity between the two currencies. August CPI data will be released in Canada tomorrow. U.S. dollar offers are cited around the C$ 1.0430 level.

BillyT Daily Forex
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BillyT's Forex Daily Currency-Trading Reviews for 17 September 2007

noreply@blogger.com (BillyT) — Tue, 18 Sep 2007 02:21:00 +0000

BillyT's Forex Daily Currency-Trading Reviews for 17 September 2007

EURO:

The euro depreciated vis-à-vis the U.S. dollar today as the single currency tested bids around the US$ 1.3850 level and was capped around the $1.3885 level. Today’s range was quite thin as traders were loath to establish new ranges ahead of tomorrow’s Federal Open Market Committee interest rate decision. Most traders expect the Fed will reduce the federal funds target rate by +25bps or +50bps on account of the recent turmoil in the financial markets that was precipitated by the subprime mortgage credit shakeout. U.S. Treasury Secretary Paulson reiterated the ongoing repricing of risk in the credit market “will be with us for a while” but that the U.S. is doing so “against a backdrop of a strong global economy.” Data released in the U.K. today saw the September Empire State manufacturing index fall to 14.7, far below its reading of 25.1 in August. In eurozone news, European Central Bank officials continued to defend their policymaking activities from ongoing criticism from French President Sarkozy. ECB member Liebscher reiterated inflationary risks are on the upside. The German government reported Germany’s jobless total could fall to 3.5 million this month or next month. It was also reported that the EMU-13 July trade surplus printed at €4.6 billion from a revised €7.6 billion in June. Euro bids are cited around the US$ 1.3620 level.

YEN:

The yen appreciated vis-à-vis the U.S. dollar today as the greenback tested bids around the ¥114.65 level and was capped around the ¥115.35 level. Technically, today’s intraday low was just above the 23.6% retracement of the move from ¥124.15 to ¥111.60. Japanese financial markets were closed for a market holiday overnight and will reopen tomorrow. All eyes are on the Japanese political landscape where a majority of lawmakers from the ruling Liberal Democratic Party are said to support the moderate Yasuo Fukuda in next Sunday’s party presidential election over challenger Taro Aso. The big question on traders’ minds is how a win by either candidate would impact Japan’s national finances and how the yen may react. Most traders believe Bank of Japan will push forth a +25bps hike in the overnight call rate before the end of the current fiscal year in March 2008, also around the time that BoJ Governor Fukui leaves office. Dollar bids are cited around the ¥113.70 level. The euro came off vis-à-vis the yen as the single currency tested bids around the ¥159.00 figure and was capped around the ¥160.15 level. The British pound and Swiss franc weakened vis-à-vis the yen as the crosses tested bids around the ¥229.05 and ¥96.60 levels, respectively. The Chinese yuan came off vis-à-vis the U.S. dollar as the greenback closed at CNY 7.5227 in the over-the-counter market, up from CNY 7.5175.

BRITISH POUND:

The British pound sold off significantly vis-à-vis the U.S. dollar today as cable tested bids around the US$ 1.9915 level and was capped around the $2.0090 level. Technically, today’s intraday low was right around the 50% retracement of the move from $1.9180 to $2.0655. Traders are driving sterling lower on account of ongoing problems at U.K. bank Northern Rock where customers withdrew sizable amounts of deposits over the weekend. Northern Rock is the U.K.’s fifth-largest home lender and received emergency funding from the Bank of England last week. Short sterling futures are now pricing in a reduction in Bank of England’s repo rate over the coming months, a stark contrast to just a few weeks ago when traders believed the MPC would lift the repo rate by +25bps to 6.00% by the end of the year. Traders await this month’s MPC meeting minutes followed by testimony from Bank of England Governor King on Thursday. The problems being faced in the U.K. money market are exemplified by the spike in short-term funding costs. The overnight sterling deposit rate jumped to 6.47% from 5.87% and the one-week rate climbed to 6.21% from 5.98%. These increases reflect the premiums being paid by financial institutions looking to secure funds in the money market. Cable bids are cited around the US$ 1.9920 level. The euro moved higher vis-à-vis the British pound as the single currency tested offers around the ₤0.6955 level and was supported around the ₤0.6905 level.

SWISS FRANC:

The Swiss franc appreciated vis-à-vis the U.S. dollar today as the greenback tested bids around the CHF 1.1845 level and was capped around the CHF 1.1900 figure. Technically, today’s intraday high was right around the 23.6% retracement of the move from CHF 1.2215 to CHF 1.1800. Q2 industrial production data will be released in tomorrow. Dollar offers are cited around the CHF 1.1960 level. The euro and British pound lost ground vis-à-vis the Swiss franc as the crosses tested bids around the CHF 1.6440 and CHF 2.3645 levels, respectively.

BillyT Daily Forex
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BillyT's Weekly Forex-Schedule from 17 September til 21 September 2007

noreply@blogger.com (BillyT) — Sun, 16 Sep 2007 22:26:00 +0000

BillyT's Weekly Forex-Schedule from 17 September til 21 September 2007

SCHEDULE

Monday, 17 September 2007

all times GMT

0000 NZ August performance of services index

0650 France U.S. Treasury Secretary Paulson speaks

0900 Eurozone July trade balance (€5.2 billion)

1100 Finland European Central Bank member Liikanen speaks

1230 US September Empire State manufacturing index (25.1)

1230 Canada July international securities transactions

1645 UK U.S. Treasury Secretary Paulson speaks

2350 Japan July tertiary industry index (0.1% m/m)

Tuesday, 18 September 2007

all times GMT

N/A Japan Bank of Japan interest rate decision

0130 Australia August imports (-4.0% m/m)

0310 Australia Reserve Bank of Australia Governor Stevens speaks

0715 CH Q2 industrial production (-4.7% q/q)

0715 CH Q2 industrial production (7.3% y/y)

0800 Spain European Central Bank member Ordonez speaks

0830 UK August consumer price index (-0.6% m/m)

0830 UK August consumer price index (1.9% y/y)

0830 UK August consumer price index, core (1.7% y/y)

0830 UK August retail price index (-0.6% m/m)

0830 UK August retail price index (3.8% y/y)

0830 UK August RPIX (2.7% y/y)

0900 Germany September ZEW, economic sentiment (-6.9)

0900 Germany September ZEW, current situation (80.2)

0900 Eurozone September ZEW, economic sentiment (-6.1)

1230 US August producer price index (0.6% m/m)

1230 US August producer price index (4.0% y/y)

1230 US August PPI, ex-food and energy (0.1% m/m)

1230 US August PPI, ex-food and energy (2.3% y/y)

1300 US July net long-term TIC flows (US$ 120.9 billion)

1300 US July total net TIC flows (US$ 58.8 billion)

1700 US September NAHB housing market index (22)

1815 US Federal Open Market Committee interest rate decision

Wednesday, 19 September 2007

all times GMT

0030 Australia July Westpac leading index (1.0% m/m)

0500 Japan July coincident index (66.7%)

0500 Japan July leading economic index (70.0%)

0530 Japan August nationwide department sales (-4.3% y/y)

0530 Japan August Tokyo-area department store sales (-3.9% y/y)

0600 Germany August producer prices (-0.1% m/m)

0600 Germany August producer prices (1.1% y/y)

0600 Japan Bank of Japan monthly report

0630 Japan Bank of Japan Governor Fukui speaks

0715 CH July retail sales (1.0% y/y)

0815 Australia Reserve Bank of Australia member Battellino speals

0830 UK September Bank of England MPC meeting minutes

1100 US MBA mortgage applications (5.5%)

1100 Canada August consumer price index (0.1% m/m)

1100 Canada August consumer price index (2.2% y/y)

1100 Canada August Bank of Canada CPI, core (0.1% m/m)

1100 Canada August Bank of Canada CPI, core (2.3% y/y)

1230 US August CPI (0.1% m/m)

1230 US August CPI (2.4% y/y)

1230 US August CPI, ex-food and energy (0.2% m/m)

1230 US August CPI, ex-food and energy (2.2% y/y)

1230 US August housing starts (1.381 million)

1230 US August building permits (1.373 million)

1230 Canada August leading indicators (0.4% m/m)

2245 NZ Q2 current account balance (-NZ$ 2.217 billion)

2350 Japan Q3 BSI large all industry

Thursday, 20 September 2007

all times GMT

N/A CH European Central Bank President Trichet speaks

0130 Australia Reserve Bank of Australia monthly bulletin

0615 CH August trade balance (CHF 1.57 billion)

0700 Japan August convenience store sales (-0.1% y/y)

0705 Japan Bank of Japan Governor Fukui speaks

0715 CH August producer and import prices (0.1% m/m)

0715 CH August producer and import prices (2.8% y/y)

0830 UK August retail sales (0.7% m/m)

0830 UK August retail sales (4.4% y/y)

0830 UK August public sector net cash requirement (-₤13.1 billion)

0830 UK August public sector net borrowing (-₤6.5 billion)

0830 UK August M4 money supply (1.0% m/m)

0830 UK August M4 sterling lending (₤24.6 billion)

0830 UK August BSA mortgage approvals (₤3.594 billion)

0830 UK August M4 money supply (13.0% y/y)

0900 CH September ZEW survey, expectations (-5.1)

0900 Eurozone July construction output (0.6% m/m)

0900 Eurozone July construction output (2.7% y/y)

1000 UK September CBI industrial trends

1230 US Weekly initial jobless claims (319,000)

1230 US Continuing jobless claims (2.585 million)

1230 Canada July wholesale sales (0.2% m/m)

1400 US August leading indicators (0.4%)

1400 US Federal Reserve Chairman Bernanke testifies

1600 US September Philadelphia Fed survey (0.0)

2350 Japan July all-industry activity index (0.2% m/m)

2350 Japan Foreign net stocks and bonds investment

2350 Japan July all-industry activity index (0.2% m/m)

Friday, 21 September 2007

all times GMT

N/A Germany European Central Bank members Papademos and Stark speak

0300 NZ August credit card spending (7.8% y/y)

0700 CH European Central Bank President Trichet speaks

0800 Eurozone July current account (€5.9 billion)

0800 Eurozone September PMI, manufacturing (54.3)

0800 Eurozone September PMI, services (58.0)

0800 Eurozone September PMI, composite (57.4)

0900 Germany Federal Reserve Governor Mishkin speaks

1230 Canada July retail sales (-0.9% m/m)

1230 Canada July retail sales, ex-autos (-0.3% m/m)

1245 US Philadelphia Fed President Plosser speaks

1235 US Federal Reserve Governor Warsh speaks

BillyT Daily Forex
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BillyT's Forex Currency-Trading WEEKLY MARKET RECAP for w/e 16 September 2007

noreply@blogger.com (BillyT) — Sun, 16 Sep 2007 22:24:00 +0000

BillyT's Forex Currency-Trading WEEKLY MARKET RECAP for w/e 16 September 2007

EURO:

The euro appreciated vis-à-vis the U.S. dollar last week as the single currency tested offers around the $1.3925 level and was supported around the $1.3765 level. The pair gained about 105 pips last week. Most traders believe the FOMC will reduce the federal funds target rate this week. Treasury boss Paulson said the subprime turmoil will last longer than the Asian and Russian crises of the 90s. Most traders see the Fed moving the federal funds target rate lower by 25bps or 50bps on Tuesday. Bernanke will discuss the subprime market before the House on 20 September. Treasury’s Paulson said the economy may pay “some penalty” on account of financial market turmoil. Atlanta Fed’s Lockhart downplayed the weak August jobs report while Philadelphia Fed’s Plosser said the Fed can address disruptions in the financial markets without “having to make a shift in the overall direction of monetary policy.” Fed Governor Mishkin warned of the “important downside risk to economic activity.” Dallas Fed’s Fisher noted a “steady hand” is better than “an itchy trigger finger.”

ECB’s Trichet said there is “no time for complacency” while ECB’s Noyer said EMU-13 economic growth should not be “significantly affected.” The European Commission reduced its 2007 GDP forecast to +2.8% with inflation at 2.0%. Germany’s IfW lowered its 2007 GDP forecast to 2.7%. EMU-13 central bankers and finance ministers are meeting in Porto this weekend.

Data released in the U.S. last week saw the July trade balance narrow to –US$ 59.2 billion; weekly initial jobless claims were up 4,000 to 319,000; continuing jobless claims were off 6,000 to 2.585 million; the Q2 current account deficit narrowed to –US$ 190.8 billion; July business inventories were up 0.5%; August retail sales were up 0.3% with the ex-autos and ex-gasoline component off 0.1%; August industrial output was up 0.2%; August capacity utilization printed at 82.2%; August import prices were off 0.3% m/m; and the University of Michigan mid-September consumer sentiment index improved to 83.8.

Data released in the eurozone last week saw French industrial production rise 1.3% m/m; the German August wholesale price index was up 0.5% m/m and 2.5% y/y; July industrial production was up 0.6% m/m and 3.7% y/y; EMU-13 labour costs were up 2.5% y/y in Q2; EMU-13 Q2 provisional employment was up 0.5% q/q and 1.7% y/y; and EMU-13 August harmonized consumer price inflation fell to 1.7%.

YEN:

The yen depreciated vis-à-vis the U.S. dollar last week as the greenback tested offers around the ¥115.40 level and was supported around the ¥112.60 level. The pair gained about 180 pips last week. The Nikkei 225 stock index closed the week at ¥16,127.42. BoJ reported the credit market turmoil is “unlikely to significantly affect the stability of Japan’s financial system.” Prime Minister Abe resigned from office and the LDP will name his successor on 19 September with Aso deemed the front-runner. The government kept its assessment of the economy unchanged but lowered its assessment of capital spending for the first time in 30 months.

Data released in Japan last week saw Q2 GDP off 0.3%; outstanding loans by Japanese banks rose 0.5% y/y in August; the M2+CD money supply rose 1.8% y/y; the economy watchers survey receded to 44.1 in August; July core private sector machinery orders rose at their fastest pace since October 2003; the August wholesale goods price index rose 1.9% y/y; August consumer confidence fell to its lowest level in 32 months at 44.0; August revised machine tool orders were up 12.6% y/y; and the July current account surplus gained 4.5% y/y.

CHINESE YUAN:

The Chinese yuan appreciated vis-à-vis the U.S. dollar last week as the greenback closed at CNY 7.5175 in the over-the-counter market, down from CNY 7.5395. PBOC’s Zhou stressed his concern over inflation. China’s new foreign exchange reserves management agency, the China Investment Co. Ltd, began operations last week.

Data released in China last week saw the August PPI index up 2.6% y/y; the August consumer price index was up 6.5% y/y; the August trade surplus printed at US$ 24.97 billion; the M2 money supply was up 18.09% at the end of August; August retail sales were up 17.1% y/y; August wholesale prices were up 6.5% y/y; August property prices in 70 cities were up 8.2% y/y; actual foreign direct investment was up 11.9% y/y; industrial value-added output was up 18.4% y/y between January and August; 2006 direct overseas investment was up 73% y/y at a record US$ 21 billion; and urban fixed-asset investment was up 26.7% between January and August.

BRITISH POUND:

The British pound depreciated vis-à-vis the U.S. dollar last week as cable tested bids around the US$ 2.0055 level and was capped around the $2.0335 level. The pair lost about 180 pips last week. Prime Minister Brown called for wage growth restraint in the public sector. BoE chief King said the current market turmoil has “clouded” the U.K. economic outlook and many traders now believe the BoE will not raise rates again this year. RICS house prices evidenced the first decline in house prices for the first time in nearly two years. News that U.K. mortgage giant Northern Rock PLC rocked sterling as did a leaked Rightmove report that saw asking prices fall 2.6% m/m.

Data released in the U.K. last week saw August manufacturing input prices off 0.5% m/m and up 0.7% y/y with the core component up +0.1% m/m and 1.8% y/y; August manufacturing output prices were up +0.1% m/m and 2.5% y/y with the core rate up +0.2% m/m and +2.4% y/y; DCLG annual house price inflation was up 12.4%; the July trade balance worsened to -₤7.1 billion; the August claimant count rate stood at 2.6; the August ILO unemployment rate printed at 5.4%; and August average earnings growth including bonuses were up 3.5% in the three months to July.

SWISS FRANC:

The Swiss franc depreciated vis-à-vis the U.S. dollar last week as the greenback tested offers around the CHF 1.1920 level and was supported around the CHF 1.1800 level. The pair gained about 10 pips last week. SNB lifted its three-month Swiss franc Libor target rate band by +25bps to 2.25% - 3.25% and is targeting the mid-point. SNB now sees 2007 inflation around 0.7% and warned against exchange rate risks. KOF lifted its 2007 GDP growth forecast to 2.6% from 2.4%.

Data released in Switzerland last week saw the 2006 trade surplus print at CHF 74 billion from CHF 63 billion while August corporate bankruptcies were up 19.1% y/y.

CANADIAN DOLLAR:

The Canadian dollar appreciated vis-à-vis the U.S. dollar last week as the greenback tested bids around the C$ 1.0275 level and was capped around the C$ 1.0590 level. The pair lost about 260 pips last week. BoC boss Dodge said rates at 4.5% are “appropriate” and added the BoC’s move to provide liquidity to the market “did not in any way signal a change in our monetary policy.”

Data released in Canada last week saw the July trade surplus fell to C$ 3.66 billion; August housing starts rose 5% to an annualized 226,500; and July manufacturing shipments were up 2.3%

AUSTRALIAN / NEW ZEALAND DOLLAR:

The Australian dollar appreciated vis-à-vis the U.S. dollar last week as the Aussie tested offers around the US$ 0.8425 level and was supported around the US$ 0.8170 level. The pair gained about 155 pips last week. RBNZ kept its official cash rate unchanged at 8.25%.

Data released last week saw the number of Australian dwellings financed in July off 4.1% m/m to 63,599; the NAB August survey of business sentiment fell to +10 from +12; and the September Westpac consumer index was up 4.2%; Q2 housing starts fell 4.0% q/q.

BillyT Daily Forex
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BillyT's Forex Daily Currency-Trading Reviews for 14 September 2007

noreply@blogger.com (BillyT) — Sat, 15 Sep 2007 06:11:00 +0000

BillyT's Forex Daily Currency-Trading Reviews for 14 September 2007

EURO:

The euro depreciated vis-à-vis the U.S. dollar today as the single currency tested bids around the US$ 1.3845 level and was capped around the $1.3895 level. U.S. Treasury Secretary Paulson reported the U.S. economy may pay “some penalty” on account of the recent financial market turmoil. Many data were released in the U.S. today. First, the U.S. current account deficit narrowed in –US$ 190.8 billion between April and June from a revised –US$ 197.1 billion in Q1 and is now around 5.5% of GDP. Second, July business inventories were up 0.5% with sales up 1.1%. Third, August retail sales were up 0.3% with the ex-autos and ex- gasoline component off 0.1%. Fourth, August industrial output was up 0.2% with capacity utilization at 82.2%. Fifth, U.S. August import prices were off 0.3% m/m, weaker-than-expected. These data are important because they afford the Federal Reserve a little extra justification to lower interest rates on Tuesday. Most dealers believe the Federal Open Market Committee will reduce the federal funds target rate by 25bps or 50bps at that time. Other data released today saw the mid-September University of Michigan consumer sentiment index improve to 83.8 from 83.4 at the end of August. In eurozone news, European Central Bank President Trichet reiterated EMU-13 price risks remain on the upside. European central bankers and finance ministers are meeting in Porto, Portugal this weekend to discuss the impact of the recent financial market turbulence on the eurozone economy. Data released in the eurozone today saw August harmonized consumer price inflation print at 1.7%, down from the flash estimate of 1.8% - the twelfth straight month the rate has been below the ECB’s 2.0% ceiling target. Euro bids are cited around the US$ 1.3620 level.

YEN:

The yen depreciated vis-à-vis the U.S. dollar today as the greenback tested offers around the ¥115.40 level and was supported around the ¥114.35 level. Technically, today’s intraday low was right around the 50% retracement of the move from ¥111.60 to ¥117.10. The Japanese government kept its assessment of the economy unchanged for September but downgraded its assessment for the first time in 30 months on account of weak capital spending. The government also noted “attention should be paid to effects of developments in the U.S. economy and changes in oil prices on the Japanese economy and overseas economies." On the political front, former foreign minister Aso appears to be the front runner to succeed outgoing Prime Minister Abe. Most traders believe Bank of Japan will keep the overnight call rate unchanged at +0.50% for the next few months and possibly lift the call rate by +25bps to +0.75% by the end of the current fiscal year in March 2008. The Nikkei 225 stock index climbed 1.94% to close at ¥16,127.42. Dollar bids are cited around the ¥113.70 level. The euro came off vis-à-vis the yen as the single currency tested bids around the ¥158.75 level and was capped around the ¥160.25 level. The British pound and Swiss franc weakened vis-à-vis the yen as the crosses tested offers around the ¥230.15 and ¥96.50 levels, respectively. The Chinese yuan came off vis-à-vis the U.S. dollar as the greenback closed at CNY 7.5175 in the over-the-counter market, up from CNY 7.5105. People’s Bank of China announced it is tightening monetary policy again, effective tomorrow, by lifting deposit and lending rates by 27 bps. Data released in China today saw 2006 direct overseas investment up 73% y/y at a record US$ 21 billion. Also, urban fixed-asset investment was up 26.7% between January and August.

BRITISH POUND:

The British pound sold off significantly vis-à-vis the U.S. dollar today as cable tested bids around the US$ 2.0055 level and was capped around the $2.0250 level. Traders continued to reduce long sterling exposure on declining expectations that the Bank of England Monetary Policy Committee will tighten monetary policy further this year. A report that U.K. mortgage lender Northern Rock PLC sought emergency funding from Bank of England pushed cable lower. The move lower was exacerbated by a leaked report from Rightmove that asking prices for houses on the market fell 2.6% m/m. Cable bids are cited around the US$ 1.9920 level. The euro moved higher vis-à-vis the British pound as the single currency tested offers around the ₤0.6905 level and was supported around the ₤0.6855 level.

SWISS FRANC:

The Swiss franc lost ground vis-à-vis the U.S. dollar today as the greenback tested offers around the CHF 1.1920 level and was supported around the CHF 1.1835 level. Dollar offers are cited around the CHF 1.1960 level. The euro gained ground vis-à-vis the Swiss franc as the single currency tested offers around the 1.6515 level while the British pound came off vis-à-vis the Swiss franc and tested bids around the CHF 2.3845 level.

BillyT Daily Forex

BillyT's Forex Daily Currency-Trading Reviews for 13 September 2007

noreply@blogger.com (BillyT) — Thu, 13 Sep 2007 20:16:00 +0000

BillyT's Forex Daily Currency-Trading Reviews for 13 September 2007

EURO:

The euro strengthened vis-à-vis the U.S. dollar today as the single currency tested offers around the US$ 1.3925 level and was supported around the $1.3860 level. The common currency established a new lifetime high and then yielded gains during the North American session. The Federal Reserve injected US$ 21 billion in liquidity today one day after it added US$ 13.5 billion to the banking system. Most traders believe the Federal Open Market Committee will reduce the federal funds target rate between 25bps and 50bps next Tuesday on account of the slowness in the U.S. housing sector and turmoil in the credit markets. Fed Chairman Bernanke will testify before the House on 20 September about the U.S. subprime mortgage meltdown. Data released in the U.S. today saw weekly initial jobless claims rise 4,000 to 319,000 while continuing jobless claims fell 6,000 to 2.585 million. Traders are paying close attention to any evidence that the U.S. labour market continues to worsen following August’s 4,000 jobs contraction as reported in last week’s non-farm payrolls tally. In eurozone news, the European Central Bank reported it will act in a “firm and timely” manner to counter price risks in its monthly bulletin. The ECB is expected to lift its main refinancing rate target by +25bps before the end of the year. Germany’s IfW research institute lowered its German 2007 GDP forecast to 2.7% from 3.2%. EMU-13 Q2 provisional employment was up 0.5% q/q and 1.7% y/y. Euro bids are cited around the US$ 1.3620 level

YEN:

The yen depreciated vis-à-vis the U.S. dollar today as the greenback tested offers around the ¥115.45 level and was supported around the ¥114.10 level. Traders dumped yen following yesterday’s resignation of Prime Minister Abe and his subsequent hospitalization on concerns that his successor may not carry forward Japan’s economic reform agenda. During his short stint in office, Abe has tightened fiscal policy and a reversal away from that could see more Japanese government bonds issued. Dealers also moved out of yen after a report emerged that Japan’s government will downgrade its assessment of its economy this month on account of weaker consumer spending and capital investments. Many traders believe Bank of Japan’s Policy Board next +25bps rate hike to +0.75% is being pushed back further with a possibility one will not emerge by the end of 2007, but perhaps by the end of Japan’s fiscal year at the end of March 2008. Around this time, BoJ Governor Fukui will leave office and the markets perceive him as wanting to lift rates before he leaves office. The Nikkei 225 stock index climbed 0.15% to close at ¥15,821.19. Dollar bids are cited around the ¥112.55 level. The euro appreciated vis-à-vis the yen as the single currency tested offers around the ¥160.35 level and was supported around the ¥158.55 level. The British pound and Swiss franc moved higher vis-à-vis the yen as the crosses tested offers around the ¥234.05 and ¥97.25 levels, respectively. The Chinese yuan appreciated sharply vis-à-vis the U.S. dollar as the greenback closed at CNY 7.5105 in the over-the-counter market, down from CNY 7.5216, a new post-revaluation low. Data released in China today saw actual foreign direct investment up 11.9% y/y in August while industrial value-added output was up 18.4% y/y between January and August.

BRITISH POUND:

The British pound came off vis-à-vis the U.S. dollar today as cable tested bids around the US$ 2.0235 level and was capped around the $2.0300 level. Traders continue to pare back their expectations that Bank of England’s Monetary Policy Committee will lift the repo rate by another +25bps to 6.00% by the end of the year. BoE’s inflation expectations survey was released today and remained steady at 2.7% despite the sizable decline in July’s inflation rate. The view that the MPC is on hold with interest rates was reaffirmed after RICS reported the first decline in house prices for the first time in nearly two years. BoE reported it will offer banks more flexibility regarding the amount of reserves they maintain with the central bank. The three-month sterling Libor rate fell to 6.88% today but is still 113bps above the BoE’s 5.75% repo target rate – the latest evidence of funding difficulties in the money market. Cable bids are cited around the US$ 2.0160 level. The euro slumped vis-à-vis the British pound as the single currency tested bids around the ₤0.6840 level and was capped around the ₤0.6875 level.

SWISS FRANC:

The Swiss franc lost ground vis-à-vis the U.S. dollar today as the greenback tested offers around the CHF 1.1890 level and was supported around the CHF 1.1800 figure. The pair earlier reached its lowest level since April 2005 before moving higher. As expected, Swiss National Bank tightened monetary policy today, its eighth consecutive interest rate rise in less than two years. SNB lifted its three-month Libor target band by 0.25% to 2.25% - 3.25% and the central bank will target the middle of that band, or 2.75%. Most SNB-watchers believe the SNB focused on upward pressures in GDP and inflation. In making the policy shift, the SNB also asserted its independence, especially after the ECB’s and BoE’s recent decisions to keep rates unchanged. Another major reason why the SNB lifted rates is on account of the relatively stong euro/ Swiss franc exchange rate. SNB reported “The volatility of the exchange rate can increase rapidly... participants in the Swiss franc credit market and entrepreneurs should always be aware of the exchange rate risks.” The SNB now sees 2007 inflation around 0.7%. Data released in Switzerland today saw August corporate bankruptcies up 19.1% y/y. Dollar offers are cited around the CHF 1.2120 level. The euro and British pound appreciated vis-à-vis the Swiss franc as the crosses tested offers around the CHF 1.6495 and CHF 2.4095 levels, respectively

BillyT Daily Forex

BillyT's Forex Daily Currency-Trading Reviews for 12 September 2007

noreply@blogger.com (BillyT) — Thu, 13 Sep 2007 02:49:00 +0000

BillyT's Forex Daily Currency-Trading Reviews for 12 September 2007

EURO:

The euro strengthened vis-à-vis the U.S. dollar today as the single currency tested offers around the US$ 1.3895 level and was supported around the $1.3825 level. The common currency established a fresh lifetime high as traders reacted to remarks from U.S. Treasury Secretary Paulson who indicated the current financial market problems may last longer than the Asian and Russian financial crises of the 1990s. Further pressure on the U.S. is likely to materialize on account of growing pressure on the Federal Reserve to reduce interest rates next Tuesday. The federal funds futures market is pricing in between 25bps and 50bps of easing by the Federal Open Market Committee next week on account of subprime mortgage and housing sector problems. In eurozone news, European Central Bank President Trichet yesterday testified that monetary policy remains on the “accommodative side” and most dealers believe the ECB will lift the repo rate by +25bps by the end of the year. Data released in the eurozone today saw July industrial production up 0.6% m/m and 3.7% y/y. Also, EMU-13 labour costs were up 2.5% y/y in Q2. Euro bids are cited around the US$ 1.3620 level.

YEN:

The yen depreciated vis-à-vis the U.S. dollar today as the greenback tested offers around the ¥114.35 level and was supported around the ¥113.75 level. Prime Minister Abe resigned today and the Liberal Democratic Party is set to name his successor on 19 September with Taro Aso looking like the most likely replacement. Abe’s resignation may be mildly yen-negative as will likely make it more difficult for Bank of Japan Governor Fukui to lift the overnight call rate to by +25bps to +0.75%. Many data were released in Japan overnight. First, the August wholesale goods price index rose 1.9% y/y, exceeding forecasts and the 42nd consecutive monthly rise. Second, August consumer confidence fell to its lowest level in 32 months, printing at 44.0 from July’s 44.4 tally. Third, August revised machine tool orders were up 12.6% y/y. Fourth, the July current account surplus gained 4.5% y/y, below forecasts. The Nikkei 225 stock index lost 0.50% to close at ¥15,797.60. Dollar bids are cited around the ¥112.55 level. The euro appreciated vis-à-vis the yen as the single currency tested offers around the ¥158.75 level and was supported around the ¥157.75 level. The British pound moved lower vis-à-vis the yen as sterling tested bids around the ¥231.00 figure while the Swiss franc appreciated vis-à-vis the yen and tested offers around the ¥96.50 level. The Chinese yuan appreciated vis-à-vis the U.S. dollar as the greenback closed at CNY 7.5216 in the over-the-counter market, down from CNY 7.5232. Data released in China saw the M2 money supply up 18.09% at the end of August and these data will likely result in additional pressure on People’s Bank of China to tighten monetary policy again this year. Also, August retail sales were up 17.1% y/y, August wholesale prices were up 6.5% y/y, and August property prices in 70 cities were up 8.2% y/y

BRITISH POUND:

The British pound came off vis-à-vis the U.S. dollar today as cable tested bids around the US$ 2.0285 level and was capped around the $2.0365 level. Sterling reached its highest level since 9 August. Bank of England Governor King again defended the central bank’s reaction to the global credit market instability. King reported “The current turmoil, which has at its heart the earlier under-pricing of risk, has disturbed the unusual serenity of recent years, but, managed properly, it should not threaten our long-term economic stability” and conceded the problems have “clouded” the U.K.’s economic outlook. King’s remarks were partly responsive to the ongoing spike in three-month sterling Libor rates that have market borrowing costs at 6.90%, a full 115bps above BoE’s headline 5.75% target rate. Most traders are significantly paring back their expectations for another rate hike from the BoE this year. Data released in the U.K. today saw the August claimant count rate at 2.6%, the lowest level since April 2005 with the ILO unemployment rare steady at 5.4%. Also, average earnings growth including bonuses was up 3.5% in the three months to July. Cable bids are cited around the US$ 2.0160 level. The euro moved higher vis-à-vis the British pound as the single currency tested offers around the ₤0.6840 level and was supported around the ₤0.6805 level.

SWISS FRANC:

The Swiss franc gained ground vis-à-vis the U.S. dollar today as the greenback tested bids around the CHF 1.1815 level and was capped around the CHF 1.1895 level. The pair has not been this week since April 2005 and the CHF 1.1740 level remains a key target for dollar bears. Swiss National Bank’s interest rate decision will be released tomorrow and many expect the central bank will lift its three-month Swiss franc Libor target by 25bps. Other traders, however, believe the SNB will keep rates on hold, much as other major global central banks have done recently. One reason why the SNB could lift rates is to prevent the Swiss franc from being sold-off further vis-à-vis the euro. Data released in Switzerland today saw the country’s 2006 current account surplus escalate to CHF 74 billion from CHF 63 billion in 2005. Dollar offers are cited around the CHF 1.2120 level. The euro moved higher vis-à-vis the Swiss franc as the crosses tested offers around the CHF 1.6465 level while the British pound came off vis-à-vis the Swiss franc and tested bids around the CHF 2.3995 level.

AUSTRALIAN / NEW ZEALAND DOLLAR:

The Australian dollar moved higher vis-à-vis the U.S. dollar today as the Aussie tested offers around the US$ 0.8430 level and was supported around the $0.8325 level. Data released in Australia overnight saw the September Westpac consumer index up 4.2%. Australian dollar bids are cited around the US$ 0.8130 level. The New Zealand dollar moved higher vis-à-vis the U.S. dollar as the kiwi tested offers around the US$ 0.7155 level and was supported around the US$ 0.7045 level. New Zealand dollar bids are cited around the US$ 0.6760 level.

CANADIAN DOLLAR:

The Canadian dollar made strong gains vis-à-vis the U.S. dollar today as the greenback tested bids around the C$ 1.0355 level and was capped around the C$ 1.0445 level. Bank of Canada Governor Dodge characterized the central bank’s current 4.50% base rate as “appropriate.” He added “The actions that we took to provide liquidity to support the smooth operation of financial markets did not in any way signal a change in our monetary policy.” U.S. dollar offers are cited around the C$ 1.0655 level.

BillyT Daily Forex

BillyT's Forex Daily Currency-Trading Reviews for 11 September 2007

noreply@blogger.com (BillyT) — Tue, 11 Sep 2007 22:47:00 +0000

BillyT's Forex Daily Currency-Trading Reviews for 11 September 2007

EURO:

The euro strengthened vis-à-vis the U.S. dollar today as the single currency tested offers around the US$ 1.3840 level and was supported around the $1.3775 level. Traders await remarks from Federal Reserve Chairman Bernanke from Berlin later today. Comments from Fed officials yesterday evidenced a wide range of opinions concerning the effects of the current global credit crunch on the U.S. economy. Fed Governor Mishkin reported that if “heightened uncertainty” leads to further pullbacks in household and business spending, “it poses an important downside risk to economic activity.” The Federal Open Market Committee convenes one week from today and many traders believe the Fed will reduce the federal funds target rate by up to 50bps. In contrast to Mishkin’s remarks, Dallas Fed President Fisher suggested a steady course of action would be sensible saying “having a steady hand rather than an itchy trigger finger” is what guides him. Fisher added “I set aside the passions of the moment and the conventional wisdom in the markets and keep a steady focus on the Fed's mission. Conducting monetary policy is not a popularity contest.” Data released in the U.S. today saw the July trade balance narrow to –US$ 59.2 billion, down 0.3% from the upwardly revised –US$ 59.4 billion in June. In eurozone news, the European Commission reduced its EMU-13 growth forecast to +2.8% from its previous projection of +2.9%. Likewise, the EC now sees 2007 inflation at 2.0% compared with earlier forecasts of 1.9%. Also, the German August wholesale price index was up 0.5% m/m and up 2.5% y/y. Euro bids are cited around the US$ 1.3620 level.

YEN:

The yen depreciated vis-à-vis the U.S. dollar today as the greenback tested offers around the ¥114.05 level and was supported around the ¥113.35 level. Bank of Japan released a report today that indicated recent credit market turmoil is “unlikely to significantly affect the stability of Japan's financial system.” Data released in Japan overnight saw July core private sector machinery orders rise at their fastest pace since October 2003. Most traders believe Bank of Japan’s Policy Board will lift the overnight call rate by +25bps to +0.75% by the end of the year. Data to be released tonight include the corporate goods price index, current account, and trade balance. The Nikkei 225 stock index gained 0.71% to close at ¥15,877.67. Dollar bids are cited around the ¥112.55 level. The euro moved higher vis-à-vis the yen as the single currency tested offers around the ¥157.55 level and was supported around the ¥156.30 level. The British pound and Swiss franc gained ground vis-à-vis the yen as the crosses tested offers around the ¥231.65 and ¥96.10 levels, respectively. The Chinese yuan came off vis-à-vis the U.S. dollar as the greenback closed at CNY 7.5232 in the over-the-counter market, up from CNY 7.5214. Data released in China saw the August consumer price index up 6.5% y/y, the highest level since December 1996. These data will likely result in additional monetary tightenings from People’s Bank of China again this year. Other data released today saw the August trade surplus print at US$ 24.97 billion, up from US$ 24.36 billion in July.

BRITISH POUND:

The British pound appreciated vis-à-vis the U.S. dollar today as cable tested offers around the US$ 2.0335 level and was supported around the $2.0235 level. Money market turmoil continues in the U.K. as the three-month sterling Libor rate rose to 6.90375%, some 115bps above the central bank’s repo target rate. Most traders expect Bank of England’s Monetary Policy Committee will lift the repo rate by +25bps to +6.00% by the end of the year. Data released in the U.K. today saw the July trade balance worsen more than expected to -₤7.1 billion from June’s -₤6.5 billion pace. Cable bids are cited around the US$ 2.0160 level. The euro moved higher vis-à-vis the British pound as the single currency tested offers around the ₤0.6810 level and was supported around the ₤0.6795 level.

SWISS FRANC:

The Swiss franc gained ground vis-à-vis the U.S. dollar today as the greenback tested bids around the CHF 1.1840 level and was capped around the CHF 1.1895 level. Traders await Swiss National Bank’s interest rate decision on Thursday and many believe the SNB may postpone their next monetary tightening. Dollar offers are cited around the CHF 1.2120 level. The euro and British pound gained ground vis-à-vis the Swiss franc as the crosses tested offers around the CHF 1.6400 and CHF 2.4120 levels, respectively

AUSTRALIAN / NEW ZEALAND DOLLAR:

The Australian dollar moved higher vis-à-vis the U.S. dollar today as the Aussie tested offers around the US$ 0.8290 level and was supported around the $0.8235 level. NAB’s August survey of business sentiment fell to +10 from +12. Australian dollar bids are cited around the US$ 0.8130 level. The New Zealand dollar moved higher vis-à-vis the U.S. dollar as the kiwi tested offers around the US$ 0.6985 level and was supported around the US$ 0.6920 level. New Zealand dollar bids are cited around the US$ 0.6760 level.

CANADIAN DOLLAR:

The Canadian dollar made strong gains vis-à-vis the U.S. dollar today as the greenback tested bids around the C$ 1.0425 level and was capped around the C$ 1.0530 level. Data released in Canada today saw the July trade surplus fall to C$ 3.66 billion, down from June’s C$ 4.33 billion level. Other data released today saw August housing starts rise 5% to an annualized 226,500. U.S. dollar offers are cited around the C$ 1.0655 level.

BillyT Daily Forex

BillyT's Forex Daily Currency-Trading Reviews for 10 September 2007

noreply@blogger.com (BillyT) — Tue, 11 Sep 2007 03:20:00 +0000

BillyT's Forex Daily Currency-Trading Reviews for 10 September 2007

EURO:

The euro strengthened vis-à-vis the U.S. dollar today as the single currency tested offers around the US$ 1.3815 level and was supported around the $1.3765 level. The common currency reached its strongest level since 8 August as traders continued to react to Friday’s weak U.S. August non-farm payrolls report that saw 4,000 jobs lost last month and sizable downward revisions to June’s and July’s tallies. Also, positive remarks from multiple European Central Bank officials over the weekend and today emboldened the common currency further. ECB President Trichet indicated there are strong indications the global economy will continue to expand despite the global credit crisis and said “"We will certainly remain alert at the global level.... This is no time for complacency.” Trichet added “When markets are embarking on significant corrections, there are also episodes of hectic behaviour, elements of overshooting in term of size of correction and also in terms of volatility. It's certainly the sentiment of central bankers who are around the table that bailing out bad investors would be the worst thing to do.” Similarly, ECB member Noyer added “Our fundamental analysis remains rather positive. There is no reason at this stage to think that euro zone growth will be significantly affected by the current disturbances on financial markets.” Data released in the eurozone today saw French industrial production rise 1.3% m/m. In U.S. news, Atlanta Fed President Lockhart spoke today and reported Friday’s U.S. payrolls report “should be evaluated with recently positive reports in retail sales. I’m processing this information along with other timely information as I prepare for next week Federal Open Market Committee meeting.” San Francisco Fed President Yellen and Federal Reserve Governor Mishkin are scheduled to speak later in the day. Philadelphia Fed President Plosser on Friday on Saturday said “I believe disruptions in financial markets can be addressed using the tools available to the Fed without necessarily having to make a shift in the overall direction of monetary policy.” Most traders believe the Fed will reduce the federal funds target rate by up to 50bps on 18 September. Euro bids are cited around the US$ 1.3620 level.

YEN:

The yen depreciated vis-à-vis the U.S. dollar today as the greenback tested offers around the ¥114.00 figure and was supported around the ¥112.60 level. Technically, today’s intraday low was right around the 76.4% retracement of the move from ¥109.00 to ¥124.15. The yen weakened after the release of weaker-than-expected Q2 GDP data that saw economic output fall 0.3% last quarter, primarily on account of weak capital expenditures. These data alone will render it more likely that Bank of Japan’s Policy Board will find it more difficult to raise interest rates in the near future from their current 0.50% level. Many traders believe the central bank will lift the overnight call rate by +0.25% to +0.75% by the end of the year. Other data released today saw outstanding loans by Japanese banks rise 0.5% y/y in August while the M2+CD money supply rose 1.8% y/y. Also, the economy watchers survey receded to 44.1 in August, its lowest level since June 2003. The Nikkei 225 stock index shed 2.22% to close at ¥15,764.97. Dollar bids are cited around the ¥112.55 level. The euro gained ground vis-à-vis the yen as the single currency tested offers around the ¥157.35 level and was supported around the ¥155.15 level. The British pound and Swiss franc moved higher vis-à-vis the yen as the crosses tested offers around the ¥231.45 and ¥96.00 levels, respectively. The Chinese yuan appreciated strongly vis-à-vis the U.S. dollar as the greenback closed at CNY 7.5214 in the over-the-counter market, down from CNY 7.5395. Data released in China today saw the August producer price index up 2.6% y/y. People’s Bank of China Governor Zhou reported he is concerned about inflation. China’s new state-controlled foreign exchange management agency, the China Investment Co Ltd, is likely to being operations this week.

BRITISH POUND:

The British pound appreciated vis-à-vis the U.S. dollar today as cable tested offers around the US$ 2.0330 level and was supported around the $2.0260 level. Technically, today’s intraday low was right around the 61.8% retracement of the move from $2.0655 to $1.9650. Data released in the U.K. today saw August manufacturing input prices decline for the second consecutive month while output prices notched their smallest gain in nine months. Input prices fell 0.5% m/m and July’s tally was downwardly revised to -0.8%. On an annualizes basis, input prices were up 0.7% after July’s 0.3% decline and the core component was up +0.1% m/m and +1.8% y/y. Producers’ output prices were up 0.1% m/m and 2.5% y/y. Core output prices were up 0.2% m/m and 2.4% y/y. For the most part, these data are unlikely to pressure Bank of England to tighten monetary policy further though most traders expect the Monetary Policy Committee will lift the repo rate by +25bps to 6.00% by the end of the year. Prime Minister Brown today reported discipline on public sector pay rises is “essential” to counter domestic inflationary pressures. Other data released in the U.K. today saw DCLG July annual house price inflation up 12.4%, its highest level since March 2005. Cable bids are cited around the US$ 2.0160 level. The euro gained ground vis-à-vis the British pound as the single currency tested offers around the ₤0.6800 figure and was supported around the ₤0.6780 level.

SWISS FRANC:

The Swiss franc gained ground vis-à-vis the U.S. dollar today as the greenback tested bids around the CHF 1.1840 level and was capped around the CHF 1.1875 level. Today’s range was very tight ahead of this week’s interest rate decision by Swiss National Bank. Most traders believe Swiss National Bank will keep monetary policy unchanged this week while a minority believes SNB will lift its three-month Swiss franc Libor rate target by +25bps. The European Central Bank’s recent decision to keep rates unchanged will likely result in no change at the SNB. The KOF economic research central lifted its 2007 GDP growth forecast to 2.6% from 2.4% with the unemployment rate forecast lower at 2.8% from 2.9%. Dollar offers are cited around the CHF 1.2120 level. The euro and British pound came off vis-à-vis the Swiss franc as the crosses tested bids around the CHF 1.6330 and CHF 2.4025 levels, respectively.

AUSTRALIAN / NEW ZEALAND DOLLAR:

The Australian dollar slumped vis-à-vis the U.S. dollar today as the Aussie tested bids around the US$ 0.8170 level and was capped around the $0.8270 level. Technically, today’s intraday high was right around the 50% retracement of the move from $0.8870 to $0.7675. Data released in Australia today saw the number of Australian dwellings financed in July off 4.1% m/m to 63,599. Australian dollar bids are cited around the US$ 0.8130 level. The New Zealand dollar moved higher vis-à-vis the U.S. dollar as the kiwi tested offers around the US$ 0.6970 level and was supported around the US$ 0.6825 level. New Zealand dollar bids are cited around the US$ 0.6760 level.

CANADIAN DOLLAR:

The Canadian dollar gained marginal ground vis-à-vis the U.S. dollar today as the greenback tested bids around the C$ 1.0525 level and was capped around the C$ 1.0590 level. Canadian data scheduled for release tomorrow include housing starts, housing prices, and international trade. U.S. dollar offers are cited around the C$ 1.0655 level.

BillyT Daily Forex

BillyT's Weekly Forex-Schedule from 9 September til 14 September 2007

noreply@blogger.com (BillyT) — Sun, 09 Sep 2007 20:06:00 +0000

BillyT's Weekly Forex-Schedule from 9 September til 14 September 2007

SCHEDULE

Sunday, 9 September 2007

all times GMT

N/A NZ August house prices

N/A CH Central bankers meet at Bank for International Settlements

2245 NZ Q2 producer prices, inputs (1.6% q/q)

2245 NZ Q2 producer prices, output (-0.2% q/q)

2350 Japan Q2 GDP (0.1% q/q)

2350 Japan Q2 GDP, annualized (0.5%)

2350 Japan Q2 GDP deflator (-0.3% y/y)

2350 Japan August M2+CD money supply (2.0% y/y)

2350 Japan August broad liquidity (4.2% y/y)

2350 Japan August bank lending (0.3% y/y)

Monday, 10 September 2007

all times GMT

0130 Australia July home loans (1.1%)

0130 Australia July investment lending (14.8%)

0500 Japan August economy watchers’ survey, current (44.7)

0500 Japan August economy watchers’ survey, outlook (46.7)

0600 CH Central bankers meet at Bank for International Settlements

0645 France July industrial production (-0.8% y/y)

0645 France July manufacturing production (-1.0% y/y)

0830 UK August producer price index, input (-0.5% m/m)

0830 UK August producer price index, input (0.1% y/y)

0830 UK August producer price index, output (0.2% m/m)

0830 UK August producer price index, output (2.4% y/y)

0830 UK August PPI, core output (0.2% m/m)

0830 UK August PPI, core output (2.3% y/y)

0830 UK July DCLG house prices (12.1% y/y)

1230 US Atlanta Fed President Lockhart speaks

1500 US San Francisco Fed President Yellen speaks

1700 US Dallas Fed President Fisher speaks

1900 US July consumer credit (US$ 13.2 billion)

2245 NZ Q2 terms of trade (2.0% q/q)

2330 NY Federal Reserve Governor Mishkin speaks

2350 Japan July machine orders (-10.4% m/m)

2350 Japan July machine orders (-17.9% y/y)

Tuesday, 11 September 2007

all times GMT

0130 Australia August NAB business confidence (12)

0130 Australia August NAB business conditions (20)

0830 UK July visible trade balance

0830 UK July total trade balance

1215 Canada August housing starts (215,600)

1230 US July trade balance (-US$ 58.1 billion)

1230 Canada July new housing price index (0.7% m/m)

1230 Canada July international merchandise trade

1400 Eurozone European Central Bank President Trichet testifies

1430 UK July leading indicator index (0.2% m/m)

1430 UK July coincident indicator index (0.2% m/m)

1500 Germany European Central Bank member Weber speaks

1500 Germany Federal Reserve Chairman Bernanke speaks

2200 Italy European Central Bank member Draghi speaks

2245 NZ August food prices (1.2% m/m)

2330 Australia Reserve Bank of Australia annual report

2350 Japan August domestic corporate goods price index (0.6% m/m)

2350 Japan August domestic corporate goods price index (2.1% y/y)

2350 Japan July current account (¥1.520 trillion)

2350 Japan July trade balance (¥1.352 billion)

Wednesday, 12 September 2007

all times GMT

0030 Australia September Westpac consumer confidence (-8.1%)

0400 Japan August bankruptcies (15.6% y/y)

0500 Japan August consumer confidence (44.6)

0600 Japan August machine tool orders

0830 UK August claimant count (2.6%)

0830 UK August jobless claims change (-8,500)

0830 UK July average earnings (3.3% y/y)

0830 UK July ILO unemployment rate (5.4%)

0830 UK July manufacturing unit wage cost (0.4% y/y)

0900 Eurozone Q2 labour costs (2.2% y/y)

0900 Eurozone July industrial production (-0.1% m/m)

0900 Eurozone July industrial production (2.3% y/y)

1100 US MBA mortgage applications (1.3%)

2100 NZ Reserve Bank of New Zealand official cash rate

2245 NZ July retail sales (-0.4% m/m)

2245 NZ July retail sales, ex-autos (-0.5% m/m)

2301 UK August RICS house price balance (12.6%)

2350 Japan Net foreign investment

Thursday, 13 September 2007

all times GMT

0030 Australia September consumer inflation expectations

0130 Australia Q2 dwelling starts (1.3%)

0400 Japan August Tokyo-area condominium sales (-10.0% y/y)

0600 Luxembourg European Central Bank member Mersch speaks

0630 France August Bank of France business sentiment

0645 France August consumer price index (1.1% y/y)

0645 France August consumer price index, harmonized (1.2% y/y)

0645 France Q2 non-farm payrolls (0.0% q/q)

0800 Eurozone September European Central Bank monthly bulletin

0800 Italy August consumer price index (1.6% y/y)

0800 Italy August consumer price index, harmonized (1.7% y/y)

0900 Eurozone Q2 employment rate (1.4% y/y)

1200 CH Swiss National Bank interest rate decision

1230 US Weekly initial jobless claims (318,000)

1230 US Continuing jobless claims (2.598 million)

1230 Canada Q2 capacity utilization (83.0%)

1800 NZ Q2 manufacturing activity (0.8%)

Friday, 14 September 2007

all times GMT

0000 NZ August PMI survey (54.6)

0430 Japan July industrial production (-0.4% m/m)

0430 Japan July industrial production (3.2% y/y)

0430 Japan July capacity utilization (105.8)

0600 Germany August consumer price index (-0.1% m/m)

0600 Germany August consumer price index (1.9% y/y)

0600 Germany August consumer price index, harmonized (2.0% y/y)

0800 Italy July industrial production (-0.1% y/y)

0900 Eurozone August consumer price index (-0.2% m/m)

0900 Eurozone August consumer price index (1.8% y/y)

1230 US Q2 current account balance (-US$ 192.6 billion)

1230 US August import price index (1.5% m/m)

1230 US August import price index (2.8% y/y)

1230 US August advance retail sales (0.3%)

1230 US August retail sales, ex-autos (0.4%)

1230 Canada Q2 labour productivity (0.7% q/q)

1230 Canada July manufacturing shipments (-1.8% m/m)

1315 US August industrial production (0.3%)

1315 US August capacity utilization (81.9%)

1400 US September University of Michigan consumer sentiment (83.4)

1400 US July business inventories (0.4%)

BillyT Daily Forex

BillyT's Forex Currency-Trading WEEKLY MARKET RECAP for w/e 9 September 2007

noreply@blogger.com (BillyT) — Sun, 09 Sep 2007 20:04:00 +0000

BillyT's Forex Currency-Trading WEEKLY MARKET RECAP for w/e 9 September 2007

EURO:

The euro appreciated vis-à-vis the U.S. dollar last week as the single currency tested offers around the $1.3795 level and was supported around the $1.3550 level. The pair gained about 140 pips last week. Traders continued to speculate as to what the FOMC will do and say on 18 September. The Fed’s Beige Book saw a “limited” impact of the current credit crunch on the economy outside of housing. Anecdotal August retail sales evidence suggests strong results. A contraction in U.S. August jobs growth and 81,000 downward revision to June’s and July’s tallies will up the Fed’s ante. Atlanta Fed’s Lockhart, Dallas Fed’s Fisher, and St. Louis Fed’s Poole talked up the U.S. economy before the jobs numbers were released.

The ECB kept its main refinancing rate unchanged at 4.00% with Trichet noting rates are still “accommodative” and adding rates could move higher by the end of the year. The EC kept its growth forecasts unchanged and still estimates Q3 GDP growth between 0.3% and 0.8% and Q4 GDP growth between 0.2% and 0.8%. ECB’s Weber called on the markets to monitor the central bank’s reaction to data.

Data released in the U.S. last week saw the August ISM manufacturing survey recede to 52.9; July construction spending was off 0.4%; ADP private sector jobs were up 38,000 in August; August Challenger job cuts were up 85.2% m/m to 79,459; July pending home sales were off 12.2% m/m; Q2 non-farm productivity was upwardly revised to an annualized 2.6%; Q2 unit labour costs fell to their lowest level in one year at +1.4%; August ISM services printed at 55.8; weekly initial jobless claims were off 19,000 to 318,000; August non-farm payrolls fell 4,000; the August unemployment rate held steady at 4.6%; and August average hourly earnings were up +0.3%.

Data released in the eurozone last week saw the August EMU-13 manufacturing PMI survey fall to a 19-month low of 54.3; EMU-13 GDP expanded 0.3% q/q and 2.5% y/y in Q2; August EMU-13 PMI services printed at 58.0; July EMU-13 retail sales were up 0.1% m/m and 0.5% y/y; German July manufacturing orders were off 7.1% m/m; German industrial production was up 0.1% m/m and 4.6% y/y; and Germany’s July current account surplus narrowed to €14.1 billion.

YEN:

The yen appreciated vis-à-vis the U.S. dollar last week as the greenback tested bids around the ¥113.10 level and was capped around the ¥116.45 level. The pair lost about 235 pips last week. The Nikkei 225 stock index closed the week at ¥16,122.16. BoJ’s next +25bps hike could be delayed by a possible contraction in Q2 GDP. Finance boss Nukaga suggested the consumption tax may rise.

Data released in Japan last week saw non-financial firms reduce their capital expenditures in Q2 for the first time in seventeen quarters, off 4.9% y/y; July employees’ average pay was off 1.9% y/y; the August monetary base rose 0.7% y/y; August machine tool orders were up 12.3% y/y; the July index of leading economic indicators fell to 70.0; the July coincident index backed off to 66.7; and August foreign reserves printed at US$ 932.16 billion.

CHINESE YUAN:

The Chinese yuan appreciated vis-à-vis the U.S. dollar last week as the greenback closed at CNY 7.5395 in the over-the-counter market, down from CNY 7.5450. PBOC indicated China does not maintain exposure to the U.S. subprime problem through its foreign reserves. A government official indicated the economy is not overheating but cautioned it could do so. Goldman Sachs predicted PBOC will lift rates twice by the end of the year. PBOC tightened monetary policy for the seventh time this year, lifting reserves requirements by 0.5%. The government reported CPI will likely remain elevated until October and reported foreign reserves are nearing US$ 1.4 trillion. PBOC’s Fan Gang said a yuan revaluation could lead to fewer jobs.

Data released in China last week saw the CLSA PMI survey improve to 53.4 from 53.1 in July.

BRITISH POUND:

The British pound appreciated vis-à-vis the U.S. dollar last week as cable tested offers around the US$ 2.0325 level and was supported around the $2.0040 level. The pair gained about 110 pips last week. Three-month sterling LIBOR spiked more than 110 bps over the repo target rate, an indication of heavy demand for financing. BoE injected overnight liquidity by raising its aggregate reserve target and pledged more but cautioned it cannot influence longer-dated maturities. BoE’s MPC kept the repo rate unchanged at 5.75% and issued a rare statement in conjunction with an unchanged decision. NIESR estimated GDP growth decelerated to 0.7% in the three months to August.

Data released in the U.K. last week saw manufacturing PMI improve to 56.3 from 55.9 in July, its strongest level in thirteen years; EEF growth in manufacturing order books and output reached its highest level since 1995; August construction PMI rose to 64.8; August BRC like-for-like retail sales were up 1.8%; the August PMI services index improved to 57.6; August REC wage pressures eased; August Nationwide consumer confidence weakened; and August BRC shop prices were unchanged m/m and up 0.4% y/y.

SWISS FRANC:

The Swiss franc appreciated vis-à-vis the U.S. dollar last week as the greenback tested bids around the CHF 1.1860 level and was capped around the CHF 1.2150 level. The pair lost about 210 pips last week

Data released in Switzerland last week saw August PMI improve to 65.1 from 63.0 in July; Q2 GDP was up 0.7% q/q and 2.8% y/y; and the August unemployment rate ticked up to 2.6% from 2.5% in July.

CANADIAN DOLLAR:

The Canadian dollar appreciated vis-à-vis the U.S. dollar last week as the greenback tested bids around the C$ 1.0475 level and was capped around the C$ 1.0580 level. The pair lost about 10 pips last week. BoC kept its overnight rate unchanged at 4.50% and dropped the word “modest further” tightening from its statement in favour of “will continue to closely monitor evolving economic and financial developments.”

Data released in Canada last week saw July building permits fell to -11.3%; the August Ivey purchasing managers; index rallied to 58.5 from 54.6 in July; and the August net change un employment grew 23,300 with the unemployment rate steady at a 33-year low of 6.0%.

AUSTRALIAN / NEW ZEALAND DOLLAR:

The Australian dollar appreciated vis-à-vis the U.S. dollar last week as the Aussie tested offers around the US$ 0.8310 level and was supported around the US$ 0.8155 level. The pair gained about 90 pips last week. RBA kept its cash rate unchanged at 6.50%.

Data released last week saw the August performance of manufacturing index fall to 52.4; August ANZ job advertisements were up 0.1% m/m; July building approvals were up 0.4% m/m; the TD Securities August inflation gauge was up 0.5% m/m; Q2 GDP was up 0.9% q/q and 4.3% y/y; the performance of services index receded to 51.6 in August; the August unemployment rate held steady at 4.3%; and the August performance of construction index receded to 48.4.

BillyT Daily Forex