The euro moved lower vis-à-vis the U.S. dollar today as the single currency tested bids around the US$ 1.4810 level and was capped around the $1.4915 level.   Data released in the U.S. today saw Q3 non-farm productivity increase to 9.5% from the revised prior reading of 6.9% while Q3 unit labour costs were off 5.2%, up from a revised -6.1%.  Also, weekly initial jobless claims continued to move lower, printing at +512,000, down from a revised 532,000 with continuing jobless claims lower at 5.749 million.  Additionally, ICSC chain store sales were up 2.1% y/y.  Collectively, these data suggest the U.S. economy remains on the mend though the productivity data can be viewed as a double-edged sword, especially as companies have become more producitve with fewer employees.  The Federal Open Market Committee's interest rate decision was released yesterday in which officials noted the economic recovery continues and pared back some of their emergency stimulus programs.  The Fed continues to make it abundantly clear that rates are likely to remain unchanged for some time.  Many economists expect October non-farm payrolls will have fallen about 175,000 with the unemployment rate around 9.9%.  Those data will be released tomorrow in the U.S.  In eurozone news, As expected, the European Central Bank kept official interest rates unchanged today with the main refinancing rate unchanged at 1%.  ECB President Trichet reported banks have a lot of liquidity already and noted the ECB's December offer of unlimited twelve-month loans will likely be its last - the latest indication the ECB is unwinding some monetary stimuli.  Nonetheless, Trichet said the ECB's exit from its emergency stimuli will be timely and gradual and reiterated the central bank will solidly anchor inflation expectations, which is absolutely key in our own strategy.  Data released in the eurozone today saw EMU-16 retail sales decline 0.7% m/m and 3.6% y/y, the third consecutive monthly decline.  Euro bids are cited around the US$ 1.4445 level. 

¥/ CNY

The yen appreciated vis-à-vis the U.S. dollar today as the greenback tested bids around the ¥90.00 figure and was capped around the ¥90.85 level.  Minutes from the Bank of Japan Policy Board meeting from 13-14 October were released overnight in which policymakers noted they'd work to make sure investors realize the removal of some emergency stimuli program does not mean official interest rates will rise.  The minutes noted the central bank plans to maintain the accommodative financial environment. BoJ Governor Shirakawa today reported it is unlikely that the decline in prices will induce downward pressure on economic activity.  Vice finance minister Minezaki called on the government and central bank to discuss the real economic threat of deflation.  The central bank and government remain at odds over the removal of monetary accommodation.   Bank of Japan Governor Shirakawa yesterday continued to talk up Japan's economy, saying given that the emerging and commodity-exporting economies are likely to continue growing at high rates, risks have been becoming balanced, compared with a situation in early spring when risks were generally tilted downside.  On interest rates, Shirakawa added The Bank of Japan declared an end to the state of emergency, but it will stand pat until the economy returns to normal. The bank will probably continue its super-low rate policy through early 2011.  BoJ's Policy Board last week predicted core consumer prices will decline 1.5% in the year ending March 2010, decline 0.8% in the fiscal year ending March 2011, and decline 0.4% in the fiscal year ending March 2012.  The central bank last week reported it will stop its purchase of corporate debt and commercial paper at the end of 2009.  BoJ Policy Board's next interest rate decision is scheduled for 19 November.  The Nikkei 225 stock index lost 1.29% to close at ¥9,717.44.  U.S. dollar offers are cited around the ¥94.75 level.  The euro moved lower vis-à-vis the yen as the single currency tested bids around the ¥133.35 level and was capped around the ¥135.15 level.  The British pound moved lower vis-à-vis the yen as sterling tested bids around the ¥148.50 level while the Swiss franc moved lower vis-à-vis the yen and tested bids around the ¥88.30 level. In Chinese news, the U.S. dollar weakened vis-à-vis the Chinese yuan as the greenback closed at CNY 6.8196 in the over-the-counter market, down from CNY 6.8205.  People's Bank of China official Jiao reported new bank loans growth may accelerate in November and December.  PBoC official Guo reported the central bank will keep liquidity reasonably abundant. 

Technical Outlook at 1230 GMT (EDT + 0400)

 

          (Bid Price)        (Today's Intraday Range)    

               

EUR/ USD      1.4856                1.4917, 1.4810
USD/ JPY          90.55                  90.85,   89.98
GBP/ USD      1.6568                1.6634, 1.6465
USD/ CHF      1.0173                1.0192, 1.0131
AUD/USD       0.9080                0.9123, 0.9023
USD/CAD       1.0649                1.0681, 1.0604
NZD/USD       0.7185                0.7244, 0.7158
EUR/ JPY       134.60                135.16, 133.35
EUR/ GBP      0.8968                0.8998, 0.8930
GBP/ JPY       150.04                150.60, 148.52
CHF/ JPY          89.01                  89.50,   88.29

Support                      Resistance                  Support               Resistance

EUR/ USD                                                          USD/ JPY

L1.       1.4470                         1.4915                            88.60                          93.30

L2.       1.4355                         1.5140                            87.10                         95.50
L3.       1.4175                         1.5360                            86.10                          98.85

   GBP/ USD                                                        USD/ CHF

L1.       1.6115                         1.6685                         1.0275                         1.0580

L2.       1.5720                         1.6830                         1.0040                         1.0695

L3.       1.5405                         1.7040                         0.9750                         1.0885

 AUD/ USD                                                       USD/ CAD

L1.       0.8450                         0.8830                         1.0535                         1.0945

L2.       0.8300                         0.9050                         1.0365                         1.1125

L3.       0.8070                         0.9120                         1.0155                         1.1355

 NZD/ USD                                                       EUR/ JPY

L1.       0.6880                         0.7125                         131.45                         135.75

L2.       0.6750                         0.7260                         129.75                         136.90

L3.       0.6535                         0.7395                         127.00                         138.75

  EUR/ GBP                                                       EUR/ CHF

L1.       0.8795                         0.8995                         1.5110                         1.5380

L2.       0.8675                         0.9105                         1.4905                         1.5580

L3.       0.8320                         0.9225                         1.4670                         1.5880

  GBP/ JPY                                                        CHF/ JPY

L1.       146.10                         152.50                           86.30                          88.65

L2.       142.05                         157.75                           85.40                          90.10

L3.        135.70                          161.70                             81.55                          91.60

SCHEDULE

 

Thursday, 5 November 2009

all times GMT

(last release in parentheses)

0030    Australia          September trade balance (-A$ 1.524 billion)

0815    CH                  October consumer price index (0.0% m/m)

0815    CH                  October consumer price index (-0.9% y/y)

0855    Australia          Reserve Bank of Australia Governor Stevens speaks

0930    UK                  September industrial production (-2.5% m/m)

0930    UK                  September industrial production (-11.2% y/y)

0930    UK                  September manufacturing production (-1.9% m/m)

0930    UK                  September manufacturing production (-11.3% y/y)

1000    Eurozone         September retail sales (-0.2% m/m)

1000    Eurozone         September retail sales (-2.6% y/y)

1200    UK                  Bank of England MPC interest rate decision

1245    Eurozone         European Central Bank interest rate decision

1330    Canada           September building permits (7.2% m/m)

1330    US                   Q3 non-farm productivity (6.6%)

1330    US                   Q3 unit labour costs (-5.9%)

1330    US                   Weekly initial jobless claims

1330    US                   Continuing jobless claims

1500    Canada          October Ivey PMI (61.7)

1600    US                   October ICSC chain store sales (0.1% y/y)

2200    Australia          October AIG performance of construction index (50.8)

Friday, 6 November 2009

all times GMT

(last release in parentheses)

N/A     UK                  October Halifax house prices (1.6% m/m)

N/A     UK                  October Halifax house prices (-7.4%)

0001    UK                  October NIESR gross domestic product estimate (0.0%)

0030    Australia          Reserve Bank of Australia quarterly monetary policy statement

0500    Japan               September leading index (83.2)

0500    Japan               September coincident index (91.2)

0620    Australia          Reserve Bank of Australia Deputy Governor Battelino speaks

0645    CH                  October unemployment rate (3.9%)

0745    France             September trade balance (€-3.4 billion)

0930    UK                  October producer price index, input (-0.5% m/m)

0930    UK                  October producer price index, input (-6.5% y/y)

0930    UK                  October producer price index, output (0.5% m/m)

0930    UK                  October producer price index, core output (0.5% m/m)

0930    UK                  October producer price index, core output (1.4% y/y)

1100    Germany         September factory orders (1.4% m/m)

1100    Germany         September factory orders (-20.4% y/y)

1200    Canada           October employment, net change (30,600)

1200    Canada           October unemployment rate (8.4%)

1330    US                   October non-farm payrolls, net change (-263,000)

1330    US                   October unemployment rate (9.8%)

1330    US                   October average hourly earnings (0.1% m/m)

1330    US                   October average hourly earnings (2.5% y/y)

1330    US                   October average weekly hours (33)

1445    US                   Federal Reserve Bank of Chicago President Evans speaks

1500    US                   September wholesale inventories (-1.3%)

2000    US                   September consumer credit (-US$ 12.0 billion)

2000    US                   Federal Reserve Governor Duke speaks