The euro depreciated vis-à-vis the U.S. dollar today as the single currency tested bids around the US$ 1.4675 level and was capped around the $1.4795 level.  The common currency pared some intraweek gains following a significant round of intervention from Asian central banks overnight in which the U.S. dollar was lifted higher.  Federal Reserve Chairman Bernanke was on the wire overnight saying interest rates will need to eventually move higher but most Fed-watchers believe the Fed will keep rates unchanged for several months.  Data released in the U.S. today saw the August trade balance print at -US$ 30.71 billion, lower-than-expected and down from a revised -US$ 31.85 billion.  This represented the first time the trade deficit has narrowed in four months.  St. Louis Federal Reserve President Bullard reported he does not see many alternatives to the U.S. dollar.  Speaking about interest rates, Bullard said the Fed's stimulus programs are creating medium-term inflation risks.  The March fed funds futures contract is now indicating traders expect rates will rise to 0.33% by then from the current range of 0% to 0.25%.  One week ago, the March contract indicated no rate hike by then.  Fed Governor Kohn reported it is important for the Fed to communicate its rate policy to the markets.  In eurozone news, Germany's merchandise trade surplus and current account surplus fell unexpectedly in August with the trade surplus lower at €8.1 billion. Also, German final September consumer price inflation was off 0.4% m/m and 0.3% y/y. European Central Bank President Trichet spoke today and said the central bank will need to phase out these measures once the rationale for their adoption fades away and the situation normalizes.  He also added the ECB has not changed its view of the economy in the most recent month and predicted the eurozone may have slightly positive eurozone growth in 2010.  Euro bids are cited around the US$ 1.4445 level.

¥/ CNY

The yen depreciated vis-à-vis the U.S. dollar today as the greenback tested offers around the ¥89.85 level and was supported around the ¥88.35 level. The pair moved higher following a significant round of intervention from Asian central banks during the Australasian session.  Japanese monetary authorities are not believed to have intervened overnight but other countries are said to have sold their local currencies and bought U.S. dollars en masse.  Data released in Japan overnight saw August core machinery orders up 0.5% m/m.  Finance minister Fujii reported it is Bank of Japan to determine when to wind down its corporate debt purchasing program.  Deputy Prime Minister called on the BoJ to keep their programs intact, noting Funding conditions for small companies are still very severe.  I hope they won't take action that contradicts that.  Fujii reiterated the U.S.'s easy monetary policy is the cause for the dollar's weakness now and added the U.S. wants a strong dollar.  The Nikkei 225 stock index climbed 1.87% to close at ¥10,016.39.  U.S. dollar offers are cited around the ¥94.75 level.  The euro moved higher vis-à-vis the yen as the single currency tested bids around the ¥132.20 level and was supported around the ¥130.65 level.  The British pound moved higher vis-à-vis the yen as sterling tested offers around the ¥143.10 level while the Swiss franc moved higher vis-à-vis the yen and tested offers around the ¥87.05 level. In Chinese news, the U.S. dollar weakened vis-à-vis the Chinese yuan as the greenback closed at CNY 6.8211 in the over-the-counter market, down from CNY 6.8220.  Chinese officials have recently indicated they will stimulate domestic final private demand to reduce China's dependence on foreign trade.

?

The British pound depreciated sharply vis-à-vis the U.S. dollar today as cable tested bids around the US$ 1.5825 level and was capped around the $1.6075 level.  Data released in the U.K. today saw September factory gate prices increase more than expected, up 0.5% m/m and 0.4% y/y. Also, the August trade deficit narrowed to its lowest level since June 2006, printing at ?6.2 billion.  September input PPI was off 0.5% m/m and 6.5% y/y. As expected, Bank of England's Monetary Policy Committee yesterday kept its main Bank Rate unchanged at 0.5% and maintained its program to purchase ?175 billion in government bonds.  Cable bids are cited around the US$ 1.5720 level.  The euro moved lower vis-à-vis the British pound as the single currency tested offers around the ?0.9290 level and was supported around the ?0.9180 level.

CHF

The Swiss franc weakened vis-à-vis the U.S. dollar today as the greenback tested offers around the CHF 1.0350 level and was supported around the CHF 1.0255 level.  Swiss National Bank member Hildebrand yesterday said international banking regulators need to coordinate their plans to wind down problem banks.  It was reported this week that Swiss unemployment climbed to its highest level in more than eleven years, printing at 4.1% in September from 4.0% in August.  U.S. dollar offers are cited around the CHF 1.0527 level.  The euro climbed higher vis-à-vis the Swiss franc as the single currency tested offers around the CHF 1.5195 level while the British pound came off vis-à-vis the Swiss franc and tested bids around the CHF 1.6335 level.

Technical Outlook at 1230 GMT (EDT + 0400)

          (Bid Price)        (Today's Intraday Range)    

               

EUR/ USD      1.4707                1.4796, 1.4673
USD/ JPY          89.81                  89.86,   88.35
GBP/ USD      1.5868                1.6077, 1.5851
USD/ CHF      1.0324                1.0351, 1.0256
AUD/USD       0.9032                0.9083, 0.9012
USD/CAD      1.0438                1.0550, 1.0410
NZD/USD       0.7326                0.7428, 0.7301
EUR/ JPY       132.13                132.18, 130.66
EUR/ GBP      0.9269                0.9275, 0.9180
GBP/ JPY       142.51                143.11, 141.65
CHF/ JPY          86.98                  87.06,   86.07

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

Sunday, 11 October 2009

all times GMT

(last release in parentheses)

N/A     NZ                   September REINZ house sales (39.0% y/y)

N/A     NZ                   September QV house prices

N/A     Germany         September wholesale price index (0.7% m/m)

N/A     Germany         September wholesale price index (-8.3% y/y)

N/A     France             Bank of France sentiment (89)

2300    US                   St. Louis Federal Reserve President Bullard speaks

Monday, 12 October 2009

all times GMT

(last release in parentheses)

N/A     NZ                    September PMI, manufacturing (48.7)

2145    NZ                   August retail sales (-0.5% m/m)

2145    NZ                   August retail sales, ex-autos (-0.5% m/m)

2301    UK                  September BRC retail sales monitor

2301    UK                  September RICS house price balance (10.7%)

2350    Japan               September M2+CD money stock (2.8% y/y)

2350    Japan               September bank lending (1.8% y/y)

Tuesday, 13 October 2009

all times GMT

(last release in parentheses)

N/A     Japan               Bank of Japan Policy Board interest rate decision

0130    Australia          September NAB business confidence (18)

0130    Australia          September NAB business conditions (4)

0645    France             September consumer price index (0.5% m/m)

0645    France             September consumer price index (-0.2% y/y)

0645    France             September CPI, harmonized (-0.2% y/y)

0645    France             August current account (-€1.2 billion)

0715    CH                  September producer and import prices (0.1% m/m)

0715    CH                  September producer and import prices (-5.5% y/y)

0830    UK                  September consumer price index (0.4% m/m)

0830    UK                  September consumer price index (1.6% y/y)

0830    UK                  September RPIX (1.4% y/y)

0830    UK                  August DCLG house prices (-8.3% y/y)

0900    Germany         October ZEW survey, economic sentiment (57.7)

0900    Germany         October ZEW survey, current situation (-74.0)

0900    Eurozone         October ZEW survey, economic sentiment (59.6)

1230    Canada           August international merchandise trade (-C$ 1.4 billion)

1230    Canada           August new house price index (0.3% m/m)

1700    US                   Federal Reserve Governor Kohn speaks

Wednesday, 14 October 2009

all times GMT

(last release in parentheses)

0000    Australia          October Westpac consumer confidence (5.2%)

0000    Australia          Q3 NAB business confidence (-4)

N/A     Japan               September Tokyo department store sales (-10.3% y/y)

N/A     Japan               September nationwide department store sales (-8.8% y/y)

0830    UK                  September retail price index (0.5% m/m)

0830    UK                  September jobless claims, net change (24,400)

0830    UK                  September claimant count rate (5.0%)

0830    UK                  August ILO unemployment (7.9%)

0830    UK                  August average earnings (1.7%)

0830    UK                  August manufacturing unit wage cost (4.3%)

0900    Eurozone         August industrial production (-0.3% m/m)

0900    Eurozone         August industrial production (-15.9% y/y)

1100    US                   MBA mortgage applications

1230    US                   September retail sales (2.7%)

1230    US                   September retail sales, ex-autos (1.1%)

1230    US                   September import price index (2.0% m/m)

1230    US                   September import price index (-15.0% y/y)

1400    US                   August business inventories (-1.0%)

1800    US                   Federal Open Market Committee meeting minutes

2145    NZ                   Q3 consumer price index (0.6% q/q)

2145    NZ                   Q3 consumer price index (1.9% y/y)

2145    NZ                   September food prices (-0.9% m/m)

2330    Australia          Reserve Bank of Australia Governor Stevens speaks

Thursday, 15 October 2009

all times GMT

(last release in parentheses)

0100    Australia          October consumer inflation expectations (3.5%)

0400    Italy                  Bank of Italy quarterly economic bulletin

0430    Japan               August industrial production

0430    Japan               August capacity utilization (3.9% m/m)

0500    Japan               Bank of Japan monthly report

0800    Italy                  September consumer price index

0800    Eurozone         October European Central Bank monthly report

0900    Eurozone         September CPI (0.3% m/m)

0900    Eurozone         September CPI (-0.2% y/y)

0900    Eurozone         September CPI (1.3% y/y)

0900    CH                   October ZEW survey, expectations (58)

1230    US                   September consumer price index (0.4% m/m)

1230    US                   September consumer price index (-1.5% y/y)

1230    US                   September CPI, ex-food and energy (0.1% m/m)

1230    US                   September CPI, ex-food and energy (1.4% y/y)

1230    US                   October Empire manufacturing index (18.88)

1230    US                   Weekly initial jobless claims

1230    US                   Continuing jobless claims

1230    Canada          August manufacturing shipments (5.5% m/m)

1400    US                   October Philadelphia Fed index (14.1)

Friday, 16 October 2009

all times GMT

(last release in parentheses)

0715    CH                  August retail sales

0800    Italy                 August trade balance

0900    Eurozone         August trade balance (€12.6 billion)

0905    Italy                 August current account

1100    Canada          September consumer price index (0.0% m/m)

1100    Canada          September consumer price index (-0.8% y/y)

1100    Canada          Bank of Canada consumer price index, core (0.1% m/m)

1100    Canada          Bank of Canada consumer price index, core (1.6% y/y)

1300    US                   August net long-term TIC flows (US$ 15.3 billion)

1300    US                   August total net TIC flows (-US$ 97.5 billion)

1315    US                   September industrial production (0.8%)

1315    US                   September capacity utilization (69.6%)

1400    US                   October University of Michigan consumer sentiment