49 minutes ago | July 24th, 2014 20:50:41 GMT

Economic data due from Japan – CPI the big one

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Japan’s CPI data for June (and July for Tokyo) come out today, earlier than 2350GMT, which is when we tend to get most Japanese data.

  • 2330GMT National CPI y/y for June, expected is 3.5%, prior was 3.7%
  • 2330GMT National CPI y/y excluding Fresh Food for June, expected is 3.3%, prior was 3.4%
  • 2330GMT National CPI excluding Food, Energy y/y for June, expected is 2.3%, prior was 2.2%
  • 2330GMT Tokyo CPI y/y for July, expected is 2.8%, prior was 3.0%
  • 2330GMT Tokyo CPI excluding Fresh Food y/y for July, expected is 2.7%, prior was 2.8%
  • 2330GMT Tokyo CPI excluding Food, Energy y/y for July, expected is 2.0%, prior was 2.0%

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2350GMT Japan PPI services for June y/y, expected is 3.6%, prior was 3.6%

Also at 2350GMT, International Transactions in Securities data from Japan’s Ministry of Finance, for the week ended July 18. This is normally data released on Thursday, but with Japan on holiday back on Monday, we get it today instead. What a treat going into the weekend …

  • Japan Buying Foreign Bonds
  • Japan Buying Foreign Stocks
  • Foreign Buying Japan Bonds
  • Foreign Buying Japan Stocks

0 comments

54 minutes ago | July 24th, 2014 20:45:03 GMT

Barclays recommend tightening stop loss on long AUD/NZD

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Barclays Research:

  • Recommend tightening the stop loss on long AUD/NZD trade to $1.0818 from previously $1.0609
  • They still target $1.1085, & expect a move to $1.1400 over the coming year

Say the higher AUD/NZD  “has reflected a multitude of factors, including:

  • 1)Yesterday’s RBNZ July OCR Review statement
  • 2)Weaker-than-expected NZ Q2 CPI inflation (1.6% y/y; cf. 1.8% y/y) and stronger-than-expected Australia Q2 underlying inflation (2.8% y/y; cf: 2.7%;
  • 3)An almost 14% decline in dairy prices (New Zealand’s largest export) at GlobalDairyTrade’s online auctions in July, meaning dairy prices have now fallen by more than 40% YTD;
  • 4)Further declines in NZ house prices, -0.3% m/m in June following a 1.2% m/m decline in May.”

Also that “The next key events for AUDNZD are the 5 August RBA meeting, the 6 August NZ labour market data and the 7 August Australia jobs report.”

0 comments

1 hour ago | July 24th, 2014 20:27:00 GMT

Had enough of New Zealand for the week? Wait, there’s more

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A little more coming from New Zealand today.

At 0100GMT:

  • ANZ Business confidence for July, prior (came in low, ANZ attributing it to lower commodity prices and higher interest rates … both of which we got more of this past month … should be fun was) was 42.8
  • ANZ Activity Outlook for July, prior was 45.8

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Is this the big turn in the New Zealand dollar?

On Wednesday I posted technical analysis from Goldman Sachs that seemed to think it is. Check it out:  Goldman Sachs asks “NZD Weakness Due?”

0 comments

1 hour ago | July 24th, 2014 20:08:31 GMT

ForexLive Americas wrap: Jobless claims boost US dollar

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Forex headlines for July 24, 2014:

US dollar strength was the story in New York trading and it came in a nice, gradual wave with USD/JPY griding out a steady 30 pips gain. Last at 101.77.

EUR/USD was at a high at the start of the session at 1.3485 following on the heels of good PMI numbers but it was a slide from there, down to 1.3465, kicked off by the jobless claims numbers and undeterred by the weak housing starts numbers.

The pound was a dog as it broke below 1.70 and hit as low as 1.6967 before catching some bids and slowly climbing back to 1.6988.

The US dollar did some damage against the commodity currencies with USD/CAD finding its way to 1.0744 from 1.0720. AUD/USD slipped down to 0.9421 from 0.9445.

The driver for the dollar was a rise (finally) in Treasury yields. It wasn’t anything spectacular but the jobless claims numbers are yet another reason for the Fed to ease off the gas pedal.

 

3 Comments

1 hour ago | July 24th, 2014 19:42:37 GMT

What’s the verdict on the kiwi dollar?

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Is this the big turn in the New Zealand dollar? It certainly could be.

Technically, NZD/USD balked at the 2011 high and even before that it was showing signs of losing momentum.

NZDUSD daily

NZD/USD daily

Today’s RBNZ decision added the missing fundamental piece to the puzzle. The story wasn’t so much the jawboning (although it was a bit more aggressive), it was the shift to a more neutral stance. Already, the OIS market has taken out the assumption for almost 2 rate hikes in the coming 12 months and lowered it to 1. On top of that, no move is likely until at least December.

The other side of the fundamental story is the US dollar, which could start to rally at any point if the Fed starts to hint at higher rates. Alternatively, a long-overdue correction in risk assets could press the NZD/USD downside.

Finally, the inability to get off the floor today and a likely close near the bottom is a negative signal.

6 Comments

2 hours ago | July 24th, 2014 18:57:46 GMT

AUD/USD ’twas better to have gotten out early

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I’ve been zoned in on the AUD/USD trade for the past  few days.

I wrote about buying on CPI on Tuesday and then cutting longs yesterday.

The pair has given back most of the post-CPI gains as the 0.9400 magnet goes to work again (last at 0.9416). I fully expect that we will touch it once again but the key will be the pre-CPI low of 0.9381. I think that level will hold and I like buying ahead of it it with a stop below.

That trade doesn’t leave a lot of room for error but if AUD/USD is going to find the strength for a run above 0.9500, it’s pretty much now or never.

AUDUSD daily

AUD/USD daily

There are no AUD-specific risks on the calendar in the day ahead.

2 Comments

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