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US Session: Norges Bank Raises Rates, Dollar Trades Sideways Ahead Of Q3 GDP
October 28, 2009 5:40 PM CET
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G10 Advancers and Decliners vs USD |
| | JPY | 0.84 |  | | | GBP | 0.07 | |  | CHF | -0.19 | | | EUR | -0.32 | | | DKK | -0.34 | | | NOK | -0.79 | | | SEK | -1.01 | | | CAD | -1.08 | | | NZD | -1.61 | | | AUD | -1.64 | |
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Global Indexes |
Current Level |
% Change |
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| FTSE 100 Index | 5'097.55 | - 1.99 | | DAX Index | 5'531.13 | - 1.84 | | SMI Index | 6'293.81 | - 1.16 | | S&P 500 Index | 1'052.28 | - 1.05 | | DJIA Index | 9'841.36 | - 0.41 | | Nikkei 225 Futures | 9'990.00 | - 2.54 | | Hang Seng Futures | 21'689.00 | - 2.26 |
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World Markets |
Current Level |
% Change |
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| Gold | 1'031.20 | - 0.85 | | Silver | 16.25 | - 2.75 | | VIX | 26.11 | + 5.16 | | Crude wti | 77.68 | - 2.36 | | USD Index | 76.33 | + 0.26 |
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Todays Calender |
Estimates |
Previous |
Country / GMT |
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| RBNZ Interest rate announcement, % Oct | 2.50 | 2.50 | NZD/20:00 | | Thu 29 Oct | - | - | - | | Industrial production, % m/m Sep | 1.0 | 1.6 | JPY/00:50 | | Germany: Unemployment rate, % Oct | 8.3 | 8.2 | EUR/08:55 | | Retail sales, m/m (y/y) Sep | 0.4 (2.2) | 0.3 (1.5) | NOK/09:00 | | Consumer confidence, index Oct | -18 | -19 | EUR/10:00 | | Industrial confidence, index Oct | -22 | -24 | EUR/10:00 | | GDP, % q/q (annualized) Q3 1st | 3.2 | -0.7 | USD/12:30 | | Initial jobless claims, thous 24 Oct | 525 | 531 | USD/12:30 | | Continuing claims, thous 17 Oct | 5905 | 5923 | USD/12:30 | | Building Permits, % m/m Sep | 4.0 | 1.7 | NZD/21:45 |
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Currency Tech |
EURUSD
R 2: 1.5967
R 1: 1.4850
CURRENT: 1.4740
S 1: 1.4684
S 2: 1.4650
GBPUSD
R 2: 1. 6484
R 1: 1.6390
CURRENT: 1.6365
S 1: 1.6240
S 2: 1.6200
USDJPY
R 2: 93.10
R 1: 92.50
CURRENT: 91.00
S 1: 90.75
S 2: 90.10
AUDUSD
R 2: 0.9330
R 1: 0.9220
CURRENT: 0.8995
S 1: 0.8985
S 2: 0.8900
USDCAD
R 2: 1.0830
R 1: 1.0785
CURRENT: 1.0780
S 1: 1.0620
S 2: 1.0500
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Market Brief |
It’s been a choppy day’s trading for the USD; equity markets across Europe and the US have traded very heavily but there has been little decisive movement for the DXY (76.25 last). Gold has struggled to make gains above its crucial $1030 support, but this has been more indicative of sagging crude oil prices ($77.90 last) than a strengthening USD.
Scandinavian data dominated the morning price action; Swedish Consumer Confidence was slightly better than expected, but Retail Sales for Sep missed estimates (0.2% MoM vs. 0.5% consensus), and there were downward revisions to the month prior (-2.3% from -2.1%). USDSEK rallied off the lows at 6.9470 to touch a high of 7.0025, and EURSEK revisited resistance around 10.3600.
This was soon followed by Norwegian AKU Unemployment Rate that unexpectedly grew to 3.2% (3.1% forecast, 3.0% last month), causing a rapid spike higher for both USDNOK and EURNOK. USDNOK rallied to test resistance around 6.7200, but gradually sold off ahead of the crucial Norges Bank rate announcement. As expected, Norway’s key rate was raised 25bps to 1.50%, but the accompanying statement signalled a steeper rate path to come. They noted that inflation was coming in higher than previously envisioned and unemployment was considerably lower than expected; suggesting it was therefore appropriate for the key rate to “be raised somewhat more rapidly than previously projected”. They now see rates to be at 3.5% in 2011 and 4.25% in 2012 compared with June forecasts of 2.75% and 3.75% respectively. Despite an initial spike lower, USDNOK bounced emphatically off the 5.6500-5.6550 support zone and has failed to puncture through on two further attempts (currently 5.6815).
In the afternoon session, US Durable Goods Orders were bang on expectations at 1.0% MoM, however New Homes Sales were distinctly disappointing: -3.6% MoM vs. +2.6% expected. The USD gleaned some support from the poor data, but EURUSD initially found decent bids around 1.4750-60 and USD gains since (1.4735 currently) have been hard won considering the slump in equity markets. Tonight’s main event to watch will be the RBNZ meeting where we are in line with consensus expecting an unchanged rate at 2.5%. However given the recent uptick in inflation and improved economic data in the past month, we are expecting the RBNZ to drop their dovish bias in the accompanying statement.
The key events to watch tomorrow will include Norwegian Retail Sales, Eurozone Consumer Confidence, and the critical US Q3 GDP first reading.
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European Session: US Recovery Seems to be Losing Momentum
October 28, 2009 11:30 AM CET
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G10 Advancers and Decliners vs USD |
| | JPY | 0.71 | | | | CHF | 0.21 | | | | GBP | 0.20 | | | | DKK | 0.18 | | | | EUR | 0.15 | | | | NOK | 0.14 | | | | SEK | 0.01 | | | CAD | -0.32 | | | AUD | -0.55 | | | NZD | -0.65 | |
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Global Indexes |
Current Level |
% Change |
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| Nikkei 225 Index | 10,075.05 | - 1.34 | | Hang Seng Index | 21,761.58 | - 1.84 | | Shanghai Index | 3,031.33 | + 0.32 | | FTSE 100 Index | 5,166.46 | - 0.66 | | DAX Index | 5,604.01 | - 0.55 | | SMI Index | 6,338.96 | - 0.45 | | S&P future | 9,820.00 | - 0.15 |
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World Markets |
Current Level |
% Change |
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| Gold | 1,037.50 | - 0.24 | | Silver | 16,65 | - 0.35 | | VIX | 24.83 | + 2.13 | | Crude wti | 79.02 | - 0.66 | | USD Index | 76.08 | - 0.07 |
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Todays Calender |
Estimates |
Previous |
Country / GMT |
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| NBP Interest rate announcement, % 29-Oct | 3.50 | 3.50 | PLN / -- | | Manufacturing confidence, index | -- | -20 | SEK / 08.15 | | Retail sales, % m/m (y/y) Sep | 0.5 | -2.1 | SEK / 08.15 | | Unemployment rate AKU, % Aug | 3.1 | 3.0 | NOK / 09.00 | | BoE mortgage approvals, k Sep | 53.1 | 52.3 | GBP / 09.30 | | BoE net mortgage lending, £ bn Sep | 0.8 | 1 | GBP / 09.30 | | BoE net consumer credit, £ bn Sep | -0.2 | -0.3 | GBP / 09.30 | | Durable goods orders, % m/m (y/y) Sep | 0.8,-19.7 | -2.6,-20. | USD / 12.30 | | Core capital goods orders, % m/m (y/y) Sep | -- | -0.9,-21.1 | USD / 12.30 | | Norges Bank interest rate announcement, % | 1.50 | 1.25 | NOK / 13.00 | | New home sales, thous Sep | 440 | 429 | USD / 14.00 | | RBNZ Interest rate announcement, % Oct | 2.50 | 2.50 | NZD / 20.00 | | Trade balance NZD bn nsa Sep | -0.659 | -0.725 | NZD / 21.45 |
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Currency Tech |
AUDUSD
R 2: 0.9330
R 1: 0.9220
CURRENT: 0.9068
S 1: 0.8985
S 2: 0.8865
USDCAD
R 2: 1.0785
R 1: 1.0717
CURRENT: 1.0731
S 1: 1.0500
S 2: 1.0380
EURJPY
R 2: 138.50
R 1: 137.37
CURRENT: 135.07
S 1: 134.75
S 2: 133.30
USDMXN
R 2: 13.455
R 1: 13.386
CURRENT: 13.276
S 1: 13.025
S 2: 12.855
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Market Brief |
Risk appetite was slightly weaker in the Asian session, as equity markets failed to shake off a weak US consumer confidence figure. The USD strengthened as a consequence, with the commodity currencies losing the most ground. We believe the markets are starting to really take notice of the mounting disparity between relative economic performances. The falling momentum can be seen in the recent US economic data (Consumer Confidence reading disappointed at 47.7 versus consensus 53.5) but also UK, Japanese and Eurozone economic data have failed to impress. However, on the other side of the world EM Asia continues to chug along, punctuated by China's recent GDP figures. We believe this deferential will be an increasing part of FX pricing but currently risk appetite reigns supreme. Today, Australian CPI barely beat expectations coming in at +1.0% q/q (cons. 0.9%, prev. 0.5%) and +1.3% y/y (cons. 1.2%, prev. 1.5%). However, with roughly 100bp of tightening already priced for the next three RBA meetings combined with the heavy feel of risk correlated trades, the topside surprise was not enough, and AUD sold off (after a flash move higher).
We are in line with market consensus in expecting the RBNZ to hold rates at 2.50%. Officials have been very clear, including Prime Minister Key, that New Zealand is unlikely to face an upwards pressure on the cash rate until mid 2010. In addition, the strong NZD has been putting “enormous pressure” on domestic exporters, increasing the probability that any tightening is a long way off. In Key's own words "As long as the exchange rate stays high, it's not likely, I would have thought, that the Reserve Bank alters interest rates". For this meeting, the most we can expect is a slightly shift in tone of the accompanying statement to a more neutral policy stance. CPI rose 1.3% q/q in the September quarter, following increases of Q2 0.6% q/q and Q1 0.3% q/q and following a decrease of 0.5% q/q in December 08. The latest figure outpaces the RBNZ own MPS forecast of 0.9% q/q and reinforces the removal of their easing bias. If the statements take a hawkish tone, this should supportive for the NZD, to the dissatisfaction of central bank members.
The highlight of the trading day just might be the Norges Bank rate decision. Its universally expected that the central bank will follow the RBA 25bp higher to 1.50%. In addition, we expect the Norges Bank to increase GDP and inflation forecasts and rate rates again in December. After the strong run up on the NOK we could see a bit of selling after the news. Another light calendar day includes durable goods orders and new home sales and the next Treasury auction is for the 5y note.
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ACM Advanced Currency Markets SA (hereinafter referred as ACM) is a professional financial intermediary, directly regulated by the Swiss Federal Department of Finance, Anti Money Laundering Control Authority. As forex specialist, ACM provides only currency trading via highly professional forex trading software. All customers are aware that this information or any part thereof has been prepared without taking account of your objectives, financial situation and/or needs. This information is not intended as personalized investment advice and does not constitute a recommendation. It is not an offer or solicitation of any offer to purchase or sell any financial instrument. The analysis is based on the information which ACM finds reliable and accurate, but ACM does not assume any responsibility for any material nor for the transactions made on the basis of the information or the estimates of the analysis. ACM cannot guarantee that these forecasts will materialize and cannot be held liable in any way for direct, indirect and/or consequential loss arising from any use of this information, document or its content. All opinions and estimates constitute ACM analysis as of the data and are subject to change without notice. ACM does not warrant the accuracy or completeness of information contained herein, such information is subject to change and is not intended to influence your investment decisions. Past performance is not a reliable indicator of future performance.
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