Forex-Schedule 30 Sept til 5 Oct 2007

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



BillyT Daily Forex
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WEEKLY MARKET RECAP for w/e 30 Sept 2007

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

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

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

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

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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