DAILY MARKET
COMMENTARY
17 December
2007
Monday
_____________________________________________________________________
GCI Foreign
Exchange Research:
www.gcitrading.com/fxnews/
FX
Research Desk:
fxnews@gcitrading.com
_____________________________________________________________________
Fundamental
Outlook at 1500 GMT (EDT +
0500)
€
The euro depreciated
sharply vis-à-vis the U.S. dollar today as the single currency
tested bids around the US$ 1.4330 level and was capped around the
$1.4450 level. The
common currency extended its recent sell-off and reached its weakest
level since 26 October.
Data released in the U.S. today saw October
net foreign purchases of long-maturity securities rebound to US$
101.5 billion from –US$ 5.2 billion the previous month. Net purchases escalated to
US$ 114.0 billion from US$ 15.4 billion in September and “monthly
net TIC flows” including non-market flows, short-term securities,
and changes in banks’ dollar holdings improved to US$ 97.8
billion. Notably, the
U.S.’s trade balance was
–US$ 57.82 billion in October thus TICS flows financed the trade
gap. Other data
released today saw the Q3 current account deficit recede to –US$
178.5 billion from a revised -$188.9 billion in Q2. Additionally, the New York
Federal Reserve Bank’s Empire State manufacturing index fell
seventeen points to 10.31, its lowest reading since May. In eurozone news, the
EMU-13 PMI manufacturing survey came off while the December services
PMI survey fell to 53.2, its weakest reading since June 2005. Bundesbank reported German
GDP growth is expected to fall to 1.6% in 2008 with inflation
increasing to 2.3%.
Euro bids are cited around the US$ 1.4355 level.
¥/
CNY
The yen appreciated marginally vis-à-vis
the U.S. dollar today as
the greenback tested bids around the ¥112.80 level and was capped
around the ¥113.50 level.
The pair consolidated some of last week’s gains that saw the
yen surrender more than 150 pips. Data released in
Japan overnight saw the
October index of leading economic indicators downwardly revised to
18.2 from 20.0 while the coincident index was upwardly revised to
70.0. Bank of
Japan’s Policy Board is not expected to lift the overnight call rate
from 0.50% for several months and traders are waiting to see if the
central bank reduces its assessment of the economy this week. The Nikkei 225 stock index
lost 1.71% to close at ¥15,249.79. Dollar bids are cited around
the ¥112.50/ 111.75 levels.
The euro came off
vis-à-vis the yen as the single currency tested bids around the
¥162.35 level and was capped around the ¥163.50 level. The British pound and Swiss
franc depreciated vis-à-vis the yen as the crosses tested bids
around the ¥227.35 and ¥97.85 levels, respectively. The Chinese yuan
depreciated significantly vis-à-vis the
U.S. dollar as the greenback closed at CNY 7.3873 in the
over-the-counter market, up from CNY 7.3720. PBoC announced large
domestic banks will need to set aside U.S. dollars rather than yuan
to cover the four most recent increases in reserve
requirements.
₤
The British pound
slumped vis-à-vis the U.S. dollar today as cable tested bids
around the US$ 2.0100 figure and was capped around the $2.0215
level. Technically,
today’s intraday high was right around the 61.8% retracement of the
move from $1.9650 to $2.1160.
Data released in the U.K. today saw December
house prices fall 3.2% m/m.
CBI reduced its 2008 GDP forecast to 2.0% from 2.2%. Cable bids are cited around
the US$ 2.0005 level. The euro came off vis-à-vis
the British pound as the single currency tested bids around the
₤0.7120 level and was capped around the ₤0.7155 level.
CHF
The Swiss franc
depreciated marginally vis-à-vis the U.S. dollar
today
as the greenback tested offers around the CHF 1.1575 level and was
supported around the CHF 1.1515 level. Technically, today’s
intraday low was right around the 61.8% retracement of the move from
CHF 1.1895 to CHF 1.0885.
The KOF institute lifted its Swiss 2007 and 2008 GDP
forecasts to 2.9% and 2.1%, respectively. Data released in Switzerland
today saw Q3 industrial production increase 10.7% y/y. U.S. dollar offers are cited
around the CHF 1.1680 level.
The euro and British
pound came off vis-à-vis the Swiss franc as the crosses tested
bids around the CHF 1.6565 and CHF 2.3215 levels,
respectively.
A$/
NZ$
The Australian dollar
slumped vis-à-vis the U.S. dollar today as the Aussie tested
bids around the US$ 0.8555 level and was capped around the $0.8650
level. The pair reached
its weakest level since 20 September. Data released in Australia
today saw Q3 housing starts up 7.5%. Australian dollar bids are
cited around the US$ 0.8330 level. The New Zealand dollar fell
sharply vis-à-vis the U.S. dollar today as the kiwi tested bids
around the US$ 0.7520 level and was capped around the US$ 0.7695
level.
C$
The Canadian dollar
appreciated sharply vis-à-vis the U.S. dollar today as the greenback tested
bids around the C$ 1.0025 level and was capped around the C$ 1.0225
level. Traders are
closely monitoring reports about funding difficulties in Canada’s
asset-backed commercial paper market. Data released in Canada today
saw Canadians purchase C$ 4.78 billion of foreign securities in
October while foreigners sold US$ 24.13 billion of Canadian
securities. U.S. dollar
offers are cited around the C$ 1.0175 level.
Technical
Outlook at 1330 GMT (EDT + 0500)
(Bid Price)
(Today’s Intraday
Range)
EUR/ USD
1.4369
1.4452,
1.4330
USD/ JPY
113.21 113.48, 112.82
GBP/ USD
2.0163
2.0216,
2.0100
USD/ CHF
1.1551
1.1573, 1.1514
AUD/ USD
0.8570
0.8649,
0.8556
USD/CAD
1.0033
1.0227, 1.0025
NZD/USD
0.7527
0.7693, 0.7522
EUR/
JPY
162.73 163.52,
162.33
EUR/
GBP
0.7127
0.7157,
0.7122
EUR/
CHF
1.6599
1.6656, 1.6574
GBP/
JPY
228.36
229.11,
227.37
CHF/
JPY
98.04
98.36, 97.83
Support
Resistance
Support
Resistance
EUR/ USD
USD/ JPY
L1.
1.4160
1.4780
111.40
116.55
L2.
1.4045
1.4870
110.25
118.35
L3.
1.3950
1.4990
106.95
120.55
GBP/ USD
USD/ CHF
L1.
2.0600
2.1140
1.1160
1.1465
L2.
2.0445
2.1230
1.1030
1.1575
L3.
2.0240
2.1350
1.0900
1.1715
AUD/ USD
USD/
CAD
L1.
0.9010
0.9410
0.9020
0.9570
L2.
0.8925
0.9500
0.8940
0.9665
L3.
0.8805
0.9615
0.8830
0.9825
NZD/
USD
EUR/
JPY
L1.
0.7625
0.7890
163.85
168.00
L2.
0.7555
0.7970
162.90
168.80
L3.
0.7415
0.8080
161.75
169.95
EUR/
GBP
EUR/ CHF
L1.
0.6915
0.7020
1.6510
1.6850
L2.
0.6840
0.7070
1.6400
1.6920
L3.
0.6710
0.7140
1.6290
1.7040
GBP/ JPY
CHF/ JPY
L1.
232.50
243.55
98.15
100.70
L2.
231.60
246.95
96.95
101.85
L3.
230.20
251.10
94.45
102.90
SCHEDULE
Sunday, 16
December 2007
all times
GMT
(last release
in parentheses)
N/A
Japan
November nationwide department store sales (-1.4%
y/y)
N/A
Japan
November Tokyo-area department store sales (0.6%
y/y)
N/A
Japan
November supermarket sales (-1.1%
y/y)
2300 NZ
November performance of services
index
2350 Japan
October tertiary industry index (-1.6%
m/m)
Monday, 17
December 2007
all times
GMT
(last release
in parentheses)
0001 UK
December Rightmove house prices (-0.7%
m/m)
0001 UK
December Rightmove house prices (7.9%
y/y)
0030
Australia
Q3 dwelling starts (-4.0%)
0500 Japan
October coincident index (66.7%)
0500 Japan
October leading economic index
(20.0%0
0815 CH
Q3 industrial production (6.7%
q/q)
0815 CH
Q3 industrial production (9.8%
y/y)
0900
Eurozone
December PMI, manufacturing
(52.8)
0900
Eurozone
December PMI, services (54.1)
1330 US
Q3 current account balance (-US$ 190.8
billion)
1330 US
December Empire state manufacturing index
(27.4)
1330 Canada
October international securities
transactions
1400 US
October net long-term TICS capital flows (US$ 26.4
billion)
1400 US
October total net TICS capital flows (-US$ 14.7
billion)
1800 US
December NAHB housing market index
(19)
Tuesday, 18
December 2007
all times
GMT
(last release
in parentheses)
0030
Australia
November imports (2.0% m/m)
0200 NZ
December NBNZ business confidence
(-19.6)
0815 CH
October retails sales (7.1% y/y)
0930 UK
November consumer price index (0.5%
m/m)
0930 UK
November consumer price index (2.1%
y/y)
0930 UK
November consumer price index, core (1.5%
y/y)
0930 UK
November retail price index (0.4%
m/m)
0930 UK
November retail price index (4.2%
y/y)
1000
Eurozone
October trade balance (€3.1
billion)
1200 Canada
November consumer price index (-0.3%
m/m)
1200 Canada
November consumer price index (2.4%
y/y)
1200 Canada
November CPI, core (-0.2% m/m)
1200 Canada
November CPI, core (1.8% y/y)
1330 US
November housing starts (1.229
million)
1330 US
November building permits (1.178
million)
1330 Canada
November leading indicators (0.1%
m/m)
2145 NZ
November food prices (0.60% m/m)
2330
Australia
October Westpac leading index (0.80%
m/m)
2350 Japan
October all-industry activity index (-1.6%
m/m)
Wednesday, 19
December 2007
all times
GMT
(last release
in parentheses)
0000
Australia
December DEWR skilled vacancies (0.60%
m/m)
0700
Germany
November producer prices (0.4%
m/m)
0700
Germany
November producer prices (1.7%
y/y)
0900
Germany
December Ifo, business climate
(104.2)
0900
Germany
December Ifo, current assessment
(110.4)
0900
Germany
December Ifo, expectations
(98.3)
0900
Belgium
European Central Bank President Trichet
speaks
0900
Austria
European Central Bank member Liebscher
speaks
0900 Italy
October industrial orders (2.8%
y/y)
0900 Italy
October industrial sales (2.30%
y/y)
0930 UK
Bank of England MPC meeting
minutes
0930 UK
Q3 total business investment
1000
Eurozone
October construction output (0.00%
m/m)
1000
Eurozone
October construction output (1.50%
y/y)
1100 UK
December CBI distributive trades
survey
1200 US
MBA mortgage applications
1330 Canada
October wholesale sales (1.1%
m/m)
1800 US
Richmond Fed President Lacker
speaks
2145 NZ
Q3 current account balance (-C$ 2.914
billion)
2350 Japan
November trade balance (¥1.018
trillion)
2350 Japan
Net equities and bonds
investment
Thursday, 20
December 2007
all times
GMT
(last release
in parentheses)
0030
Australia
Reserve Bank of Australia monthly
bulletin
0500 Japan
Bank of Japan interest rate
decision
0600 Japan
Bank of Japan monthly report
0645 CH
December SECO economic forecasts
0700 Japan
November convenience store sales (-1.20%
y/y)
0710
Germany
January GfK consumer confidence
(4.3)
0715 CH
November trade balance (CHF 1.56
billion)
0815 CH
November producer and import prices (0.2%
m/m)
0815 CH
November producer and import prices (2.7%
y/y)
0900 Italy
October retail sales (-0.6% y/y)
0930 UK
Q3 GDP (0.7% q/q)
0930 UK
Q3 GDP (3.2% y/y)
0930 UK
Q3 current account (-₤9.1
billion)
0930 UK
November public sector net cash requirement (-₤4.8
billion)
0930 UK
November public sector net borrowing (-₤1.0
billion_
0930 UK
November M4 money supply (0.2%
m/m)
0930 UK
November M4 money supply (11.8%
y/y)
0930 UK
November M4 sterling lending (₤19.5
billion)
0930 UK
November BSA mortgage approvals (₤3.985
billion)
1330 US
Weekly initial jobless claims
(333,000)
1330 US
Continuing jobless claims
1330 US
Q3 GDP, annualized (4.9%)
1330 US
Q3 GDP price index (0.9%)
1330 US
Q3 PCE, core (1.8% q/q)
1500 US
November leading indicators
(-0.5%)
1700 US
December Philadelphia Fed index
(8.2)
2145 NZ
Q3 GDP (0.7% q/q)
2145 NZ
Q3 GDP (3.2% y/y)
2300
Australia
October leading index (0.5%)
Friday, 21
December 2007
all times
GMT
(last release
in parentheses)
0200 NZ
November credit card spending (7.8%
y/y)
0700
Germany
November import price index (0.7%
m/m)
0700
Germany
November import price index (2.3%
y/y)
0750 France
November consumer spending (2.7%
y/y)
0750 France
November producer price index (0.6%
m/m)
0750 France
November producer price index (3.3%
y/y)
0900
Eurozone
October current account (€600
million)
0900 Italy
November hourly wages (0.5% m/m)
0900 Italy
November hourly wages (2.0% y/y)
0930 UK
November retail sales (-0.1%
m/m)
0930 UK
November retail sales (4.4% y/y)
0930 UK
October index of services (0.9%)
1000
Eurozone
October industrial new orders (-1.6%
m/m)
1000
Eurozone
October industrial new orders (2.0%
y/y)
1330 US
November PCE deflator (2.90%
y/y)
1330 US
November PCE deflator, core (0.20%
m/m)
1330 US
November PCE deflator, core (1.90%
y/y)
1330 US
November personal income (0.2%)
1330 Canada
October GDP (0.1% m/m)
1330 Canada
October retail sales (-0.20%
m/m)
1330 Canada
October retail sales, ex-autos (0.10%
m/m)
1330 US
November personal spending
(0.2%)
1500 US
December University of Michigan consumer sentiment
(74.5)
DISCLAIMER: GCI’s Daily Market Commentary is
provided for informational purposes only. The information contained
in these reports is gathered from reputable news sources and is not
intended to be U.S.ed as investment advice. GCI assumes no
responsibility or liability from gains or losses incurred by the
information herein contained.
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