AUD/USD Weekly Fundamental Analysis Jan. 30-Feb. 3, 2012, Forecast

Economic Events: (GMT)

Please review the daily forecast for explainations and expected results

AUD-NZD Calendar

Jan. 30  21:45     NZD       Building Consents (MoM)     8.0%                      -6.4%                    

Jan. 31  00:30     AUD       NAB Business Confidence     2                             

Feb. 01 00:00     AUD      HIA New Home Sales (MoM)     6.8%                     

                00:30     AUD       House Price Index (QoQ)     -0.60%                 -1.20%                

                21:45     NZD      Employment Change (QoQ)     0.2%                     

                21:45     NZD       Unemployment Rate     6.6%                     

Feb. 02 00:30     AUD       Building Approvals (MoM)     2.1%                      8.4%                     

                00:30     AUD      Trade Balance     1.20B                     1.38B

USD Calendar

Jan. 30  13:30     USD       Core PCE Price Index (MoM)     0.1%                      0.1%                     

                13:30     USD      Personal Spending (MoM)     0.2%                      0.1%                     

                13:30     USD      Employment Cost Index (QoQ)     0.4%                      0.3%                     

                14:45     USD       Chicago PMI     63.0                        62.5                       

                15:00     USD      CB Consumer Confidence     68.2                        64.5                       

Feb. 01 13:15     USD       ADP Nonfarm Employment Change     190K                      325K                     

                15:00     USD       ISM Manufacturing Index     54.5                        53.9                       

Feb. 02 13:30     USD      Nonfarm Productivity (QoQ)     1.0%                      2.3%                     

                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                   

                15:00     USD       Fed Chairman Bernanke Testifies                                                                                              

Feb. 03  00:15     USD      FOMC Member Fisher Speaks                                                                                                   

                13:30     USD      Average Hourly Earnings (MoM)     0.2%                      0.2%                     

                13:30     USD      Nonfarm Payrolls     150K                      200K                     

                13:30     USD      Unemployment Rate     8.5%                      8.5%                     

                13:30     USD       Private Nonfarm Payrolls     170K                      212K                     

                15:00     USD      ISM Non-Manufacturing Index     53.2                        52.6


The Australian dollar still isn’t in its good old days, but the performance is definitely improving. Resistance lines tend to work in a smoother manner than support lines, but they also work well. The pair move well together, not much volatility, but easy to chart and easy to trade with low risk factors

 Weekly Analysis and Recommendation:

The AUD/USD ended the week at 1.0658 +0.0025 (+0.24%)

The Australian dollar

closed out the  week close to a three-month high against its U.S. counterpart on Friday, as market sentiment was boosted by new signs of progress in talks to restructure Greek sovereign debt. As the USD fell due to weak economic news and the FOMC statement the Aussie seemed to be the biggest benefactor. The USD fell against all major currencies.

AUD/USD hit 1.0670 on Thursday, the pair’s highest since October 31; the pair subsequently consolidated at 1.0655 by close of trade on Friday, adding – over the week. 

The Good:

 US Durable Goods orders in Dec surprise to upside but how much was pulled forward from 2012 due to 12/31 expiration of full depreciation expensing?

 Jan US confidence rises to best since Feb ’11

 Richmond and KC manufacturing survey’s both rise

The Bad:

Q4 US GDP rises 2.8%, a touch below expectations but nominal GDP gains just 3.2%, the weakest since Q3 ’09. If deflator was in line with expectations, Real GDP would have been up just 1.3%. Real final sales up just .8% vs. 3.2% in Q3

 Initial Jobless Claims normalize at 377k after holiday distorted 356k last week

 Inflation expectations within UoM rise to 3.3%, the most since Sept and remains above the 20 yr avg of 3.0%. Expectations also rise to multi month highs in TIPS market

 New Home Sales remain weak, prices fall 12.8% y/o/y

 FOMC stretches out zero rates until late 2014, US$ resumes downward trend against everything. Fed destroying the price mechanism as if interest rates are artificially priced, what are assets really worth? If we don’t know what assets are really worth, how can capital be efficiently allocated?

There are significant reports due out this coming week, in Australia, New Zealand, and the US. We should see the USD pick up some of its strenght this week as the Fed statement becomes the past.

Upcoming Sovereign Bond Sales Dates

Jan 30  10:10  Italy   BTP/CCTeu auction

Jan 30  10:10  Norway  Nok 4.0bn 5.0% May 2015 bond

Jan 30  11:00  Belgium  OLO Auction

Jan 30  12:00  Norway  Details bond auction on Feb 06

Jan 31  10:30  Belgium  Auctions 3 & 6M T-bills

Jan 31  15:30  UK  Details gilt auction on Feb 07

Feb 01  10:10  Sweden  Auctions T-bills

Feb 01  10:30  Germany  Eur 5.0bn 2.0% Jan 2022 Bund

Feb 01  10:30  Portugal  Eur 0.75-1.0bn 3M T-bill

Feb 01  10.30  UK  Auctions 5.0% 2025 conventional Gilt

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 I/L Gil

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