NZ/Aus/S. Africa - Weekly Update - Written by renee on Monday, July 13, 2009 23:28 - 0 Comments
World First NZD/AUD Weekly Update - 13th July 2008
NZD
Sentiment in New Zealand appears to be picking up as the NZIER quarterly survey of business opinion for the June quarter showed last week with headline business confidence and domestic trading activity expectations both rising in the quarter. However, sentiment towards profit, employment and investment remains weak.
In June total retails spending fell 1.0 percent in the month, while core spending fell 1.2 percent. In seasonally adjusted terms the REINZ house sales for June rose 9.3 percent in the month, and the median days to sell fell 1 day to 40 days. House prices are now flat on a year ago.
Looking to the week ahead, we doubt domestic news in relation to the CPI and retail sales will bring a NZ specific story to the fore.
AUD
Australia’s unemployment rate rose to a stronger-than-expected seasonally adjusted 5.8% in June from 5.7% in May. The number of employed fell 21,400, the Australian Bureau of Statistics said Thursday. These results better than what Economists on average had expected an unemployment rate of 5.9% in June, with the number of employed down 25,000.
A July survey of inflationary expectations shows Australian consumers expect prices to rise 3.2% over the next 12 months, up from 2.8% in June. Australia’s consumer price index rose 2.5% in the March quarter of 2009 from a year earlier.
An index of consumer sentiment in Australia rose 9.3% in July from June to reach its highest level since December 2007, as shoppers’ spirits were lifted by government cash handouts, upbeat views on the domestic economy and still-resilient employment levels. The index rose to 109.4 points in July in seasonally adjusted terms from 100.1 points in June, compilers Westpac Banking Corp. and the Melbourne Institute said in a statement. In annual terms, the consumer sentiment index rose a seasonally adjusted 38.5% in July. In trend terms, the index rose 5.4% from June, contributing to a 25.7% annual increase.
The week ahead:
NZD
Monday 13th – Retail Sales (May) mom
Thursday 16th – Business NZ PMI (Jun), Food Prices (Jun) mom, Consumer Prices qoq/yoy
AUD
Tuesday 14th – NAB Business Conditions (Jun)
Friday 17th – Import/Export Price index qoq
GBPNZD
There was news last week that the Bank of England I considering an extension to its quantitative easing program but they decided to hold off on that as with the interest rate which there was a no change outcome from the meeting last Thursday leaving the cost of borrowing at 0.5 percent.
The GBPNZD rate traded in the higher end of the current band last week, remaining in between the 2.55 – 2.60 level. After the announcement that they weren’t going to increase the amount of quantitative easing stance Sterling gained on the NZD climbing to the high of the week on Friday of GBPNZD 2.5976.
The week ahead in the UK:
Tuesday 14th – RICS House Price Balance (Jun), CPI (Jun) mom/yoy
Wednesday 15th – ILO Unemployment rate (May)
GBPAUD
It was a strong week for Sterling against the Australian Dollar in which it gained 5 cent on throughout the week. Monday trading kicked off around the 2.04 level and after a short stint in the 2.02’s GBP appreciated for the remainder of the week with the rate just above the 2.09 level on closing on Friday. This movement took the pairing to the highest the rate has been since April and could be an indication of the trading band moving to a higher level for the time being.
With second tier data out from both sides this week the rate could remain steady around the 2.07 level. For data out in the UK please refer to GBPNZD above.
EURNZD
House sales in the EU were worse in Q1 of 2009 than in Q4 of 2008 a feat that has not been repeated and shows how far behind the curve the EU is currently lagging.
This pairing moved similarly to the GBPNZD pairing last week, with EUR losing ground on Tuesday and the rate dipping to the low of the week 2.1949 from there EUR climbed and the EURNZD rate spent what was left of the week hovering around the 2.22 level.
The week ahead in the Euro zone:
Tuesday 14th – ZEW Economic Sentiment (Jul)
Wednesday 15th – CPI (Jun)
Friday 17th – Trade Balance (May), Construction Output (May)
EURAUD
Euro found its footing against the Australian Dollar last week with the rate moving to the highest it has been since the last week of May. EUR climbed from opening at 1.7581 on Monday to end the week up at 1.7928 on Friday.
This week eyes will be on the economic sentiment figures to be released on Wednesday, a positive result could mean further gains for the Euro. For data out in the Euro zone please refer to EURNZD above.
NZDUSD
Concerns at present are centred on the US earnings season, with the effects of the global economic slowdown expected to show through in company results. Over the week the S&P 500 closed down 1.7 percent, US 10 year yields traded down 20bps to 3.3 percent.
Commodities had a torrid week with a number of factors working against them. The recent elevation in concerns over global growth has seen oil hit aggressively; down nearly 20 percent in two weeks. The CRB index, a broader measure of commodity prices, was down 4.9 percent last week alone.
The NZD was initially caught in the crossfire breaking key support at around 0.6240 and briefly pushing below 0.62 before staging a recovery to finish the week largely unchanged. But across the commodity bloc, the NZD has been lagging on this move, and the weeks ahead may well be all about catch-up.
The week ahead in the US:
Wednesday 15th – PPI (May) mom, Retail Sales (Jun) mom
Thursday 16th – CPI (Jun) mom, Industrial Production (Jun), Minutes of June 24 FOMC Meeting
Friday 17th – Initial Jobless Claims (w/e Jul 12th), NAHB Housing Market Index (Jul)
AUDUSD
The Australian Dollar was a commodity currency not immune to the effects of increasing oil prices and depreciated against the USD last week. The AUDUSD rate falling to the lowest it has been since mid May at 0.7757 on Friday.
The US economic calendar fuller this week than the Australian we could continue to see this rate move in the USD favour for the time being. For data out in the US please refer to NZDUSD above.
AUDNZD
Despite the positive data out in Australia last week in the form of consumer sentiment being the highest level since December 2007 the Australian Dollar didn’t manage to feed off that with the New Zealand finding itself making ground on the AUD for the duration of last week bringing the pairing down to the lowest point at AUDNZD 1.2363. This is the lowest the AUDNZD has been since mid April of this year.
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Please feel free to contact me (renee.doughty@worldfirst.com) if you have any questions or thoughts regarding these updates or if you are interested in a particular event in the calendar.
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Disclaimer: The above comments are only our views and should not be construed as advice. You should act using your own information and judgement. Although information has been obtained from and is based upon multiple sources the author believes to be reliable, we do not guarantee its accuracy and it may be incomplete or condensed. All opinions and estimates constitute the author’s own judgement as of the date of the briefing and are subject to change without notice.
Any rates given are “interbank” i.e. for amounts of £5million and thus are not indicative of rates offered by World First for smaller amounts. E&OE. Definitions of jargon/market terms can be found in our Glossary of Foreign Exchange Terms.
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