NewZealand July New Dwelling Consents rise 5%

The number of new dwelling consents approved in NewZealand, recovered in July, up 5% s/adj vs previous month, showing signs the housing sector is gradually recovering.

Seansonally adjusted, 1151 newdwellings were approved in July against 1097 in June.

JPY crosses holding bid tone in early Tokyo

EUR/JPY is back up close to rumoured sell orders at 134.80/00 but is showing little signs of tiredness. It must be Friday as I’ve been thinking to myself that USD/JPY might be a good buy. Perhaps I need a break! I’ll hand over to Sam for the next few hours and turn my platform off to resist taking trades I don’t really believe in.

Nikkei opens up 0.7%, wait and see effect of poor data

The Nikkei is up 0.7% and this will aid the JPY selling which has become apparent after the horrible jobs and CPI data which came out 30 minutes ago. USD/JPY is up 25 pips since NY close and EUR/JPY is up 50.

Japan jobless rate hits all time high at 5.7%

Japan: More bad news for the sitting government on the eve of a general election. The latest economic data makes for bad reading with CPI now running at -2.2% YoY with July core CPI posting the biggest fall on record.

The JPY has weakened slightly on this news with EUR/JPY popping back up through the overnight high at 134.40. This pair looked so bearish yesterday but not today. Hearing of some light selling interest around 134.80/00 which should slow down any major moves higher.

And for the next major bubble, enter China

The lead in to this article in the online Caijing magazine says it all; “how much of China’s bank lending ended up in stock and property markets was a mystery until an analyst gave his scary estimate”. The one reliable facet of human nature is our total inability to learn from past mistakes.

Latest on China’s EUR/USD double-no-touch

Thanks to Gerry’s investigative skills, the latest information on China’s dnt option is that they bought on the 19th and 20th of August for one month with barriers at 1.3950/1.4450. We still believe that the downside protection will outweigh the topside as China is for the present a natural buyer of EUR/USD as they seek to diversify out of the USD.

UK consumer confidence steady in August

The GFK consumer confidence index for the UK was steady in August at -25, slightly below the -23 median forecasts. Sterling is as usual unchanged and generally only reacts to this data when Europe opens.

Selling interest emerging in EUR/GBP

We wrote lots in the last few weeks about a major player who had been soaking up EUR/GBP on every dip into the low .85s and now I’m hearing that the same player is looking to sell around .8860. My technical analysis earlier in the week (I’ll refresh in the next little while) suggested that the target for this leg of the upmove was .8815/35 and with the overnight high at .8840, my analysis is potentially vindicated. I stick with my view that a short-term top will form close to current levels and that we see a retracement back towards the low .87s before the next leg higher.

Fed’s Bullard on newswires

St Louis Federal Reserve Bank President, James Bullard: Not saying anything dramatic;

• need to see much more convincing economic data before even considering raising rates,
• inflation is stable and it’s vital to avoid a prolonged period of deflation
• important that Fed maintains it’s independence

Choppy August markets continue

We got a taste of how this market is trading yesterday during the Asian session when the AUD/USD based at .8240 and rallied even while the EUR and cable fell. Those who had managed to get short close to the top were more than happy to book their 150 pips profit and shorts started feeling nervy. Exactly the same scenario played itself out in the EUR/USD overnight when solid buying interest at 1.4210/20 based the market, encouraging shorts to cover and eventually chase the market. I am not reading anything much into these up-and-down movements- merely a very clear signal of market indecision.

There should still be some decent movement in the JPY crosses today before the election weekend although I’m sure most of the stop-hunting has already been done overnight.

Good luck today.