USD/JPY Consolidates Gain

Financial and Economic News and Comments

US & Canada

• The US trade deficit in goods and services widened 9.7% m/m in November to a larger-than-expected $36.4 billion, the highest level since January, from a revised $33.2 billion deficit in October, according to figures from the Commerce Department. Imports rose 2.6% m/m to $174.6 billion in November, reflecting a rise in oil prices. Exports grew 0.9% m/m, a seventh straight gain, to $138.2 billion, the highest level in a year, led by food and autos/parts.

• Canada's trade balance unexpectedly showed a trade deficit of C$344 million ($333 million) in November after an upwardly revised C$503 million surplus in October, data released by Statistics Canada showed. The November deficit was led by increasing imports of energy, machinery and automobiles. Exports increased 1.1% m/m to C$31.6 billion in November as energy shipments rose 6.2% m/m. Imports increased 3.9% m/m to C$31.9 billion, with energy imports rising 13.1% m/m.

• Canada's new housing prices grew 0.4% m/m in November, a fifth consecutive month-on-month gain, after a 0.3% m/m increase in October, Statistics Canada reported. November new housing prices slipped 1.4% y/y following October's 2.1% y/y decrease, with continued year-on-year drops in Western Canada, albeit at a slower rate than in prior months.

Europe

• The UK deficit on trade in goods and services shrank more than expected to £2.9 billion ($4.7 billion) in November from a revised £3.1 billion deficit in October (originally reported as a £3.2 billion deficit), and the deficit on trade in goods narrowed more than expected to £6.8 billion from October's revised £7.0 billion deficit (originally reported as a £7.1 billion deficit), according to figures from the Office for National Statistics. Exports were broadly unchanged, but imports declined £0.2 billion. The deficit with EU countries widened to £3.8 billion in November from a £3.5 billion deficit in October, while the deficit with non-EU countries narrowed to £3.0 billion from October's £3.5 billion deficit.

• UK house prices increased a more-than-expected 0.6% y/y nsa in November after a 2.2% y/y decline in October, according to data from the Department of Communities and Local Government. November house prices grew 1.7% m/m sa, a seventh consecutive month-on-month gain.
• The seasonally adjusted net balance of surveyors reporting increasing rather than decreasing UK house prices was at a reading of 30% in December, unexpectedly down from 35% in November, a monthly survey from the Royal Institution of Chartered Surveyors showed, suggesting UK house prices continued to increase but at a slightly more modest pace.
• UK retail sales gained for a fourth consecutive month in December, rising 4.2% y/y on a like-for-like basis after a 1.8% y/y November increase, compared with a 3.3% decrease in December 2008, the British Retail Consortium reported. On a total basis, retail sales gained 6.0% y/y in December, the most for the month since 2005, after a 4.1% y/y advance in November, compared with a 1.4% decline in December 2008.

Asia-Pacific

• Japan's current-account surplus widened for a fourth consecutive month in November, growing 76.9% y/y to a higher-than-expected ¥1.1 trillion ($11.9 billion), figures released by the Ministry of Finance showed. Exports fell 7.0% y/y in November, the smallest fall in 14 months, after a 24.6% y/y drop in October. Imports slipped 18.2% y/y, following October's 37.7% y/y drop.
• Japan's merchant confidence climbed in December for the first time in three months. The Japanese current conditions index increased to a higher-than-expected 35.4 last month, rebounding from a record 7-point drop to 33.9 in November, according to the Cabinet Office's latest economy watchers survey. The future conditions index rose to 36.3 in December from 34.5 the prior month.

• Australia's home-loan approvals fell a more-than-expected 5.6% m/m in November, the largest fall in 18 months, to 59,516, after a revised 1.9% m/m decline in October, according to figures from the Australian Bureau of Statistics. The total value of loans decreased 1.6% m/m to A$22.8 billion ($21.2 billion) in November. The value of lending for owner occupied housing fell 2.9% m/m to A$16.5 billion in November while the value of lending for investment housing increased 2.1% m/m to A$6.3 billion.

FX Strategy Update

 
EUR/USD
USD/JPY
GBP/USD
USD/CHF
USD/CAD
AUD/USD
EUR/JPY

Primary Trend
Positive
Negative
Neutral
Negative
Negative
Positive
Neutral

Secondary Trend
Negative
Positive
Negative
Positive
Negative
Neutral
Neutral

Outlook
Negative
Positive
Negative
Positive
Neutral
Neutral
Neutral

Action
Sell
Buy
Sell
Buy
None
None
None

Current
1.4484
91.08
1.6157
1.0185
1.0391
0.9203
131.93

Start Position
1.4628
88.67
1.6440
1.0340
N/A
N/A
N/A

Objective
N/A
N/A
N/A
N/A
N/A
N/A
N/A

Stop
1.4590
87.30
1.6250
0.9900
N/A
N/A
N/A

Support
1.4400
90.00
1.5900
1.0100
1.0300
0.8750
129.00

1.4250
88.50
1.5800
1.0000
1.0200
0.8600
126.00

Resistance
1.4550
93.00
1.6200
1.0500
1.0700
0.9300
134.00

1.4750
94.50
1.6550
1.0300
1.1000
0.9400
138.00