Economic Events: (GMT)

00:30 AUD Building Approvals (MoM) 2.1% 8.4%

Building Approvals (also known as Building Permits) measures the change in the number of new building approvals issued by the government. Building permits are key indicator of demand in the housing market.

A higher than expected reading should be taken as positive/bullish for the AUD, while a lower than expected reading should be taken as negative/bearish for the AUD.

 00:30 AUD Trade Balance 1.20B 1.38B

The Trade Balance measures the difference in value between imported and exported goods and services over the reported period. A positive number indicates that more goods and services were exported than imported.

A higher than expected reading should be taken as positive/bullish for the AUD, while a lower than expected reading should be taken as negative/bearish for the AUD.

 13:30 USD Nonfarm Productivity (QoQ) 1.0% 2.3%

Nonfarm Productivity measures the annualized change in labor efficiency when producing goods and services, excluding the farming industry. Productivity and labor-related inflation are directly linked-a drop in a worker's productivity is equivalent to a rise in their wage.

A higher than expected reading should be taken as positive/bullish for the USD, while a lower than expected reading should be taken as negative/bearish for the USD.

 13:30 USD Initial Jobless Claims 373K 377K

 13:30 USD Unit Labor Costs (QoQ) 0.9% -2.5%

 13:30 USD Continuing Jobless Claims 3565K 3554K

Initial Jobless Claims measures the number of individuals who filed for unemployment insurance for the first time during the past week. This is the earliest U.S. economic data, but the market impact varies from week to week. Continuing Jobless Claims measures the number of unemployed individuals who qualify for benefits under unemployment insurance.

Unit Labor Costs measure the annualized change in the price businesses pay for labor, excluding the farming industry. It is a leading indicator of consumer inflation.

A higher than expected reading should be taken as positive/bullish for the USD, while a lower than expected reading should be taken as negative/bearish for the USD.

15:00 USD Fed Chairman Bernanke Testifies

Federal Reserve Chairman Ben Bernanke (February 2006 - January 2014) is to testify on the economic outlook and recent monetary policy actions before the Joint Economic Committee, in Washington DC. The testimony is in two parts; the first is a prepared statement, then the committee conducts a question and answer session. The Q&A portion of the testimony can see heavy market volatility for the duration.

AUD/USD

AUD/USD Fundamental Analysis Feb. 2, 2012 Forecast

Analysis and Recommendation: ( closed of asian session )

AUD/USD was trading at 1.0609

The AUD fell today, on reports shoing weaken Australian housing market on fears the economy may be cooling. The Australian Bureau of Statistics reported that the House Price Index, which measures home values in the country's eight state capitals, fell by 1.00% in the fourth quarter of 2011, well below market expectations for a -0.60% figure.

While the AUD continues to be the currency of choice for investors given the yield return, the AUD may see some profit taking heading into next week's RBA meeting.

The AUD/USD has rallied 9 cents over the past month so importers might consider taking advantage of the move for at least of a portion of outstanding exposures. With central banks around the world reducing or keeping interest rates at very low levels to try and spur growth, locally the RBA do have room to cut and a 25bp rate cut at next week's RBA meeting is currently priced in by the market.

Reports in the US showed that manufacturing activity in the Chicago area declined unexpectedly in January. The Chicago PMI declined to a seasonally adjusted 60.2, from a reading of 62.5 in December. Although this report only covers a small area of the US it is thought to be a key view of US manufacturing. Markets had forecast the PMI to rise to 63.0 in January.

In Europe economic data was weak and disappointing, most reports met weak forecasts or fell below expectations, except for the bright spot an unexpected improvement in German Unemployment, dropping by 4000.

German Unemployment Change -34K; better than expected.

SNB currency reserves at CHF 257.5 bln for the end of December.

French Consumer Spending (Dec) -0.7%; worse than expected.

French Producer Prices (Dec) -0.1%, as expected.

Barclays raises their 6 month AUD/USD forecast from 1.0100 to 1.0500.

Swiss UBS consumption indicator (Dec) 0.92 vs 0.81 prior reading.

Scheduled Sovereign Bond Sales

Feb 01 15:30 Sweden Details nominal bond auction on Feb 08

Feb 01 16:00 US

Announces details of 3Y Notes on Feb 07, 10Y Notes on Feb

08 & 30Y Bonds on Feb 09

Feb 02 09:50 France OAT Auction

Feb 02 10.30 UK Auctions 0.125% 2029

AUD/USD Pivot Points (Time Frame: 1 Day)

 Name  S3  S2  S1  Pivot  R1  R2  R3

 Classic
1.0432
1.0500
1.0549
1.0617
1.0666
1.0734
1.0783

 Fibonacci
1.0500
1.0545
1.0573
1.0617
1.0662
1.0690
1.0734

 Camarilla
1.0565
1.0576
1.0586
1.0617
1.0608
1.0618
1.0629

 Woodie's
-
1.0495
1.0538
1.0612
1.0656
1.0729
-

 DeMark's
-
-
1.0641
1.0605
1.0525
-
-