Westpac Global Markets Strategy Group
Thursday 20th October 2011
|Text too small?|
Consolidation ahead of EC summit. The 4-14 Oct surge in risk sentiment stalled last night, market participants appearing to be unwilling to place significant bets until some clarity emerges regarding the Eurozone rescue plan to be discussed at this weekend’s EC summit.
News flow was mixed, an encouraging bounce in US housing starts and a benign US core CPI reading only partly offsetting the earlier weak Apple earnings result and the Moody’s downgrade of Spain.
A limp US Beige Book survey of regional economic conditions, just released, is adding weight to markets as we write. Some minor EZ rescue comments came from Moody’s which said Greek bondholders are likely to face a 60% haircut, and from a Reuters snap poll of fund managers who said they would be reluctant to buy EFSF-insured bonds at current levels.
The Eurostoxx 50 closed 1.0% higher but the S&P500 is currently down 0.8%, as is the CRB commodities index (copper -3.0%).
US 10yr treasury yields peaked at 2.22% soon after the US house building data, but bare trading at 2.16% post-Beige book – 2bp lower on the day.
The US dollar index fell in London and rose in NY for little change at 77.05. EUR started in London around 1.3780 and peaked in NY post-data at 1.3869, falling to 1.3740 currently. USD/JPY remained inside 76.70 and 76.86.
AUD mimicked the EUR, rising from 1.0353 by mid-morning London and then sliding 1.0227 currently. NZD similarly rose to 0.8007 and then slid 0.7918. AUD/NZD held recent gains around 1.2920.
AUD/USD and NZD/USD outlook next 24 hours: Immediate AUD appears to be heading towards 1.0120 support today, with NZD similarly heading to 0.7860. AUD/NZD shows no signs of reversal yet, 1.3000 possible this week. RBA-speak from Battellino and Edey will be watched this morning.
No comments yet
NZ dollar gains on G20 preference for growth
NZ dollar dips as Wellington CBD checked for quake damage
NZ dollar gains, bolstered by RBA minutes, strong dairy prices
NZ dollar falls after central bank says it may scale up currency intervention
NZ dollar gains before CPI, helped by dairy gains, rally on Wall Street
NZ dollar trades little changed as US budget talks bear down on deadline
NZ dollar falls with equities on view US to sail over fiscal cliff
NZ dollar weakens as fiscal cliff looms, long bets unwind
NZ dollar sinks to three-week low as equities fall, fiscal talks in focus
NZ dollar slips as fiscal cliff talks grind slower in Washington