€
The euro depreciated vis-à -vis the U.S. dollar today as the single currency tested bids around the US$ 1.3505 level and was capped around the $1.3625 level. Technically, today’s intraday high was just below the $1.3633 level, representing the 38.2% retracement of the $1.2587 – $1.4281 range. The common currency moved lower after German December factory orders came in far lower-than-expected at -3.4% m/m and +19.7% y/y. Traders are wondering if the data evidence a bona fide deceleration in economic activity at the end of Q4. These data are important because Germany has been the eurozone’s primary economic growth engine, especially considering the problems faced by peripheral eurozone sovereign countries. German December industrial production data will be closely scrutinized tomorrow along with the January Bank of France business sentiment index. On a positive note, the EMU-17 February Sentix investor confidence survey improved to 16.7 from the prior reading of 10.6 in January. European Central Bank President Trichet reiterated the new European Systemic Risk Board has to “earn credibility†with regard to its “wide-ranging mandate.†Trichet also said it would not be appropriate for Greece and Ireland to apply haircuts to their debt positions. The ECB reported it did not purchase any eurozone government bonds last week for the second consecutive week. ECB member Weber reported there is an “urgent need†to strengthen the EU’s Stability and Growth Pact and called on eurozone governments to reduce deficits “swiftly.†Three-month Euribor fell to 1.084% today from recent nineteen-month highs as traders have scaled back expectations for tighter ECB policy. ECB member Gonzalez-Paramo warned rates will need to rise if inflation does not decline but added the ECB believes the current spike is “temporary†and linked to an increase in raw materials prices. French Finance Minister Lagarde said the euro is suffering from a weak U.S. dollar and Chinese yuan. In U.S. news, December consumer credit data will be released later today. U.S. Treasury Secretary Geithner verbally intervened and said a “stable and strong†U.S. dollar is the best thing for the global economy. Traders are still talking about the weaker-than-expected January U.S. non-farm payrolls data released on Friday and the economic distortion from stormy weather. Euro bids are cited around the US$ 1.3435 level.
Â¥/ CNY
The yen depreciated vis-à -vis the U.S. dollar today as the greenback tested offers around the ¥82.45 level and was supported around the ¥82.15 level. Technically, today’s intraday low was above the ¥82.41 level, representing the 38.2% retracement of the ¥85.93 – 80.24 range. Bank of Japan Governor Shirakawa reported Japan should make “every effort to maintain the confidence shown by markets while working on mid-to long-term fiscal consolidation†and warned “no country can continue to run fiscal deficits forever.†Last month, Standard & Poor’s reduced Japan’s debt rating to AA-, the fourth highest ratings level. Shirakawa also said additional asset purchases “may be needed.†The Japanese government warned Japan’s public debt will probably reach to ¥997.7 trillion in the fiscal year starting in April. Regarding the economic outlook, Shirakawa noted “Recent data suggest that Japan’s economy looks like it is about to emerge from that pause. As far as short-term economic and financial developments are concerned, Japan’s situation is by no means worse than that of other advanced economies.†A group of Democratic Party of Japan legislators today reported “Monetary policy must be used to beat deflation†adding the government and BoJ need to “deepen policy coordination to promote further monetary easing.†Data released in Japan overnight saw January official reserve assets decline to US$ 1.093 trillion from the prior reading of US$ 1.096 trillion. Also, the December coincident index improved to 103.1 while the December leading index improved to 101.4. Data to be released tonight include the January money supply, January bank lending, December current account, December trade balance, and January economy watchers survey. The Nikkei 225 stock index climbed 0.46% to close at ¥10,592.04. The euro moved lower vis-à -vis the yen as the single currency tested bids around the ¥111.45 level and was capped around the ¥112.20 level. The British pound moved higher vis-à -vis the yen as sterling tested offers around the ¥133.25 level while the Swiss franc moved higher vis-à -vis the yen and tested offers around the ¥86.25 level. In Chinese news, the U.S. dollar was unchanged vis-à -vis the Chinese yuan today the greenback closed at CNY 6.5850 in the over-the-counter market. Liquidity was light on account of the Chinese New Year holiday and financial markets should return to normal after tomorrow. The January HSBC services PMI survey will be released tomorrow night. Data released in China last week saw January PMI manufacturing decline to 52.9 while January non-manufacturing PMI ticked lower to 56.4. People’s Bank of China is largely expected to raise official interest rates over the next several weeks.
£
The British pound appreciated vis-à -vis the U.S. dollar today as cable tested offers around the US$ 1.6185 level and was supported around the US$ 1.6090 level. Technically, today’s intraday low was above the $1.6076 level, representing the 38.2% retracement of the $1.5750 – 1.6277 range. Data to be released in the U.K. overnight include the BRC retail sales monitor and the January RICS house price balance. Bank of England’s Monetary Policy Committee will release its monetary policy decision on Thursday and a growing number of dealers believe the vote will be a close call. Inflation remains significantly above-target in the U.K. and more economists believe the BoE is falling behind the curve and jeopardizing its credibility and inflation-fighting credentials. Former MPC member Besley said the BoE’s quarterly inflation forecasts will likely show inflation growth decelerating to the 2% target when the report is next published on 16 February. Inflation has remained above the central bank’s target for more than one year and reached 3.7% in December. MPC members Weale and Sentance last week called for an increase in the Bank Rate from its record low of 0.5%. Cable bids are cited around the US$ 1.5965 level. The euro depreciated vis-à -vis the British pound as the single currency tested bids around the £0.8400 figure and was capped around the £0.8445 level.
CHF
The Swiss franc depreciated vis-à -vis the U.S. dollar today as the greenback tested offers around the CHF 0.9595 level and was supported around the CHF 0.9530 level. Technically, today’s intraday high just above the CHF 0.9592 level, representing the 38.2% retracement of the CHF 1.0065 – 0.9299 range. Data to be released in Switzerland this week include the January unemployment rate tomorrow along with January SECO consumer confidence and January consumer price inflation data on Thursday. Data released in Switzerland last week saw January foreign currency reserves increase to CHF 207.9 billion and it is not believed Swiss National Bank conducted franc-selling intervention last month. Also, the December trade balance expanded to CHF 1.93 billion from the revised prior reading of CHF 1.79 billion. Swiss banking giant UBS last week reported it expects Swiss National Bank will begin raising its benchmark rate in June by 25bps to 0.5%, three months later than previously expected. U.S. dollar offers are cited around the CHF 0.9775 level. The euro depreciated vis-à -vis the Swiss franc as the single currency tested bids around the CHF 1.2940 level while the British pound moved higher vis-à -vis the Swiss franc and tested offers around the CHF 1.5495 level.
Technical Outlook at 1330 GMT (EST + 0500)
(Bid Price) (Today’s Intraday Range)
EUR/ USD 1.3557 1.3626, 1.3533
USD/ JPY 82.21 82.46, 82.15
GBP/ USD 1.6134 1.6184, 1.6090
USD/ CHF 0.9555 0.9597, 0.9529
AUD/USD 1.0154 1.0156, 1.0103
USD/CAD 0.9862 0.9895, 0.9857
NZD/USD 0.7716 0.7718, 0.7677
EUR/ JPY 111.49 112.18, 111.44
EUR/ GBP 0.8404 0.8445, 0.8399
GBP/ JPY 132.67 133.23, 132.20
CHF/ JPY 86.03 86.25, 85.79
Support Resistance Support Resistance
EUR/ USD USD/ JPY
L1. 1.3575 1.3880 81.55 84.60
L2. 1.3360 1.4025 80.80 85.85
L3. 1.3275 1.4425 79.30 87.30
GBP/ USD USD/ CHF
L1. 1.5810 1.6190 0.9320 0.9775
L2. 1.5645 1.6300 0.9145 0.9965
L3. 1.5320 1.6430 0.8860 1.0120
AUD/ USD USD/ CAD
L1. 0.9820 1.0170 0.9785 1.0140
L2. 0.9720 1.0365 0.9590 1.0355
L3. 0.9540 1.0440 0.9480 1.0585
NZD/ USD EUR/ JPY
L1. 0.7455 0.7840 110.40 114.25
L2. 0.7380 0.7975 109.60 115.65
L3. 0.7210 0.8220 107.20 118.05
EUR/ GBP EUR/ CHF
L1. 0.8375 0.8705 1.2810 1.3115
L2. 0.8260 0.8820 1.2735 1.3285
L3. 0.8110 0.8910 1.2560 1.3495
GBP/ JPY CHF/ JPY
L1. 129.00 135.70 85.50 89.75
L2. 127.10 138.10 84.00 90.90
L3. 125.60 139.85 82.20 92.30
SCHEDULE
Sunday, 6 February 2011
all times GMT
(last release in parentheses)
2330 Australia January performance of construction index (43.8)
Monday, 7 February 2011
all times GMT
(last release in parentheses)
0030 Australia January ANZ job advertisements (2.0% m/m)
0030 Australia December retail sales (0.3% m/m)
0030 Australia December retail sales, ex-inflation (0.7% q/q)
0330 Japan Bank of Japan Governor Shirakawa speaks
0500 Japan December coincident index (102.4)
0500 Japan December leading index (100.6)
0500 Japan January official reserve assets (US$ 1.096 trillion)
0930 Eurozone February Sentix investor confidence (10.6)
1100 Germany December factory orders (5.2% m/m)
1100 Germany December factory orders (20.6% y/y)
1330 Canada December building permits (-11.2% m/m)
2000 US December consumer credit (US$ 1.364 billion)
2350 Japan January M2+CD money supply (2.3% y/y)
2350 Japan January bank lending (-1.9% y/y)
2350 Japan December current account total (Â¥926.2 billion)
2350 Japan December current account balance (-15.7% y/y)
2350 Japan December trade balance (Â¥259.7 billion)
Tuesday, 8 February 2011
all times GMT
(last release in parentheses)
0001 UK BRC retail sales monitor
0001 UK January RICS house price balance (-39%)
0430 Japan January bankruptcies (-3.0% y/y)
0500 Germany December retail sales (-2.4% m/m)
0500 Germany December retail sales (2.0% y/y)
0500 Japan January economy watchers survey, current (45.1)
0500 Japan January economy watchers survey, outlook (43.9)
0645 CH January unemployment rate (3.8%0
0730 France Bank of France business sentiment (108)
0745 France December trade balance (-€3.9 billion)
1100 Germany December industrial production (-0.7% m/m)
1100 Germany December industrial production (11.1% y/y)
1230 US January NFIB small business optimism (92.6)
1315 Canada January housing starts (171,500)
1345 US Richmond Fed President Lacker speaks
1800 US Atlanta Fed President Lockhart speaks
2145 NZ January credit card spending (-0.9% m/m)
2300 NZ January QV house prices (-0.9% y/y)
2330 Australia February Westpac consumer confidence (-5.7%)
Wednesday, 9 February 2011
all times GMT
(last release in parentheses)
0001 UK BRC shop price index
0230 China January HSBC services PMI (53.1)
0500 Japan January consumer confidence (40.2)
0600 Japan January machine tool orders (64% y/y)
0700 Germany December trade balance (€12.9 billion)
0700 Germany December current account (€12.0 billion)
0930 UK December visible trade balance (-£8.736 billion)
0930 UK December trade balance, total (-£4.123 billion)
1200 US MBA mortgage applications
2245 US New York Fed official Sack speaks
2350 Japan Q4 housing loans (3.6% y/y)
2350 Japan December machine orders (-3.0% m/m)
2350 Japan December machine orders (11.6% y/y)
2350 Japan January domestic corporate goods price index (0.4% m/m)
2350 Japan January domestic corporate goods price index (1.2% y/y)
Thursday, 10 February 2011
all times GMT
(last release in parentheses)
0030 Australia January employment, net change (2,300)
0030 Australia January unemployment rate (5.0%)
0200 China January trade balance (US$ 13.08 billion)
0200 NZ January non-resident bond holdings
0500 UK January NIESR gross domestic product estimate
0645 CH January SECO consumer confidence (7)
0745 France December industrial production (2.3% m/m)
0745 France December industrial production (6.0% y/y)
0745 France December manufacturing production (2.2% m/m)
0745 France December manufacturing production (5.1% y/y)
0815 CH January consumer price index (0.0% m/m)
0815 CH January consumer price index (0.5% y/y)
0900 Eurozone February European Central Bank monthly bulletin
0900 Italy December industrial production
0930 UK December industrial production (0.4% m/m)
0930 UK December industrial production (3.3% y/y)
0930 UK December manufacturing production (0.6% m/m)
0930 UK December manufacturing production (5.6% y/y)
1200 UK Bank of England interest rate decision
1200 UK Bank of England asset purchase target (£200 billion)
1330 US Weekly initial jobless claims (415,000)
1330 US Continuing jobless claims (3.925 million)
1330 Canada December new housing price index (0.3% m/m)
1500 US December wholesale inventories (-0.2%)
1745 US Atlanta Fed President Lockhart speaks
2145 NZ January food prices (-0.8% m/m)
Friday, 11 February 2011
all times GMT
(last release in parentheses)
0500 NZ January REINZ housing price index (-0.6% m/m)
0500 NZ January REINZ housing price index (-11.3% y/y)
0630 France Q4 non-farm payrolls (0.1% q/q)
0700 Germany January consumer price index (-0.5% m/m)
0700 Germany January consumer price index (1.9% y/y)
0700 Germany January CPI, harmonized (-0.5% m/m)
0700 Germany January CPI, harmonized (2.0% y/y)
0745 France December current account (-€4.2 billion)
0745 France Q4 wages (0.3% q/q)
0930 UK January producer price index, input (3.4% m/m)
0930 UK January producer price index, input (12.5% y/y)
0930 UK January producer price index, output (0.5% m/m)
0930 UK January producer price index, output (4.2% y/y)
0930 UK January producer price index, output core (0.2% m/m)
0930 UK January producer price index, output core (2.9% y/y)
1330 US December trade balance (-US$ 38.3 billion)
1330 Canada December international merchandise trade (-C$ 100 million)
1455 US February University of Michigan consumer sentiment (74.2)
