USD/CNY Fundamental Analysis April 25, 2012 Forecast

Analysis and Recommendation: (close of Asian session)

The USD/CNY is trading at 6.3003.

The Chinese currency Renminbi, or the yuan, weakened by 33 basis points to 6.3003 against the U.S. dollar on Tuesday, according to the China Foreign Exchange Trading System.

The central parity rate of the yuan against the U.S. dollar is based on a weighted average of prices before the opening of the market each business day. 

Disappointing manufacturing figures from China added weakness to the Chinese currency. Traders have begun to position themselves before the US Federal Reserve FOMC meeting. The decisions are due to be released on Wed.

Also political turmoil in Europe has helped strength the greenback

Economic Data for April 23 & 24, 2012 actual v. forecast

 

 

EUR

 

 

 

French Manufacturing PMI 

47.3

 

47.2 

 

46.7 

 

 

 

 

EUR

 

 

 

German Manufacturing PMI 

46.3

 

49.0 

 

48.4 

 

 

 

 

EUR

 

 

 

Manufacturing PMI 

46.0

 

48.2 

 

47.7 

 

 

 

 

CAD

 

 

 

Wholesale Sales (MoM) 

1.6%

 

-1.0% 

 

-1.1% 

   

Apr. 24

 

AUD

 

 

 

CPI (QoQ) 

0.1%

 

0.6% 

 

0.0% 

 

 

 

 

AUD

 

 

 

Trimmed Mean CPI (QoQ) 

0.3%

 

0.6% 

 

0.6% 

 

 

 

Economic Events scheduled for April 25, 2012 that affect the NZD, AUD, and JPY

13:30     USD       Core Durable Goods Orders (MoM)                                        0.5%                      1.8%

Core Durable Goods Orders measures the change in the total value of new orders for long lasting manufactured goods, excluding transportation items. Because aircraft orders are very volatile, the core number gives a better gauge of ordering trends. A higher reading indicates increased manufacturing activity.

13:30     USD       Durable Goods Orders (MoM)                                                   -1.5%                     2.4%       

Durable Goods Orders measures the change in the total value of new orders for long lasting manufactured goods, including transportation items.

 17:30    USD       Interest Rate Decision                                                                                                  

Federal Open Market Committee (FOMC) members vote on where to set the rate. Traders watch interest rate changes closely as short-term interest rates are the primary factor in currency valuation

 22:00    NZD       Interest Rate Decision                                                                   2.50%                    2.50%   

The Reserve Bank of New Zealand (RBNZ) governor decides where to set the rate after consulting senior bank staff and external advisers. Traders watch interest rate changes closely as short term interest rates are the primary factor in currency valuation.

Government Bond Auctions (this week)

Apr 25  09:10  Sweden  Auctions T-bills

Apr 25  09:30  Germany  Eur 3.0bn new Jul 2044 Bund

Apr 25  14:30  Sweden  Details nominal bond auction on May 02

Apr 25  17:00  US  Auctions 5Y Notes

Apr 26  00:30  Japan  Auctions 2Y JGBs

Apr 26  09:10  Italy   BOT auction

Apr 26  14:30  Sweden  Details I/L bond auction on May 03

Apr 26  17:00  US  Auctions 7Y Notes

Apr 27  09:10  Italy   BTP/CCTeu auction

Central Banks Take Center Stage

This is going to be a busy week for the central bank committees and the markets will be waiting on news, announcements and indications of what the banks are going to decide.

On Wednesday we will hear the Federal Open Markets Committee Interest Rate Announcement. There is a clear division among the FOMC policy makers on when the Fed should start tightening monetary policy.

Some policy makers have called for an exit and rate hikes as early as this year, while a couple of committee members felt that policy accommodation should continue until 2016. With some of the recent U.S. economic data beginning to show signs of weakness and forecasts predicting slower economic growth, it would not be surprising to see the Fed maintaining a dovish stance and expressing a cautious outlook on the economy and the labor market, but stopping short of announcing another round of quantitative easing at this meeting.

However, QE3 will not be completely out of the picture and will remain as a viable option, especially if the occasional soft spots in the U.S. economic data become a persistent trend of deteriorating economic conditions lasting for at least a couple of months. Although additional quantitative easing may not come until the second half of the year or simply not at all, the future fate of the U.S. dollar will continue to depend on QE3 expectations and the Fed’s next move.

Following the FOMC the markets will get news from the Reserve Bank of New Zealand. With the inflation gauge lower than expected, the global economy slowing and the EU debt crisis far from over, the Reserve Bank of New Zealand will not be in any hurry to start hiking rates and is expected to keep the benchmark interest rate at the current 2.50% level. The RNZ will try to anticipate the upcoming RBA move and also interpret the April 3rd decision.

The announcement that the markets have been waiting for will be heard on Friday when the  Bank of Japan offers their interest rate decision and statement. Everyone expects that the Bank of Japan will announce additional expansion of its quantitative easing operations, but not everyone is betting on the bank lifting its inflation target to 2%.

Such move would make sense, especially because in February the combination of more QE with a 1% inflation target has proven to be an effective tool in the Bank of Japan’s campaign to weaken the yen. Considering that a decision to make additional asset purchases may be already priced in, the Japanese central bank will need to deliver a “shock and awe” type of an announcement in order to trigger another leg of significant yen weakness.

A failure to do so could see the yen quickly erasing some of its recent losses against the U.S. dollar and other currency majors. It will be a difficult call for the bank, but they will be watching the FOMC release earlier in the week.

USD/CNY Fundamental Analysis April 24 , 2012 Forecast

Analysis and Recommendation: (close of Asian session)

The USD/CNY traded at 6.3048 as the yuan weakened on disappointing manufacturing data from China.

China’s manufacturing activity contracted further in April, although the sector improved from levels seen in March, a preliminary reading from HSBC showed Monday. HSBC’s so-called “flash” Purchasing Managers’ Index rose to 49.1 in April, compared with a final reading of 48.3 in March. A reading below 50 shows contraction, while one above 50 indicates an expansion. The improvement in factory conditions in April suggests that the earlier easing measures have started to work and hence should ease concerns of a sharp growth slowdown.

Eco data for Monday April 23, 2012 actual v. forecast that affect the ANZ, JPY, NZD and CNY

Apr. 23

 

AUD

 

 

 

PPI (QoQ) 

-0.3%

 

0.4% 

 

0.3% 

 

 

 

 

CNY

 

 

 

Chinese HSBC Manufacturing PMI 

49.10

 

 

 

48.30 

   

Economic Events scheduled for April 24, 2012 that affect the NZD, AUD, JPY and CNY

02:30     AUD      CPI (QoQ)                                                                                                            0.6%       

The Consumer Price Index (CPI) measures the change in the price of goods and services from the perspective of the consumer. It is a key way to measure changes in purchasing trends and inflation.

02:30     AUD      Trimmed Mean CPI (QoQ)                                           0.6%                      0.6%

The Trimmed Mean Consumer Price Index (CPI) measures the change in the price of goods and services purchased by consumers, excluding the most volatile 30% of items. This data helps illustrate underlying inflation trends. 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.

15:00     USD       CB Consumer Confidence                                            70.3                        70.8

Conference Board (CB) Consumer Confidence measures the level of consumer confidence in economic activity. It is a leading indicator as it can predict consumer spending, which plays a major role in overall economic activity. Higher readings point to higher consumer optimism.

15:00     USD       New Home Sales                                                             320K                      313K     

New Home Sales measures the annualized number of new single-family homes that were sold during the previous month. This report tends to have more impact when it’s released ahead of Existing Home Sales because the reports are tightly correlated

Government Bond Auctions (this week)

Apr 24  00:30  Japan  Auctions 20Y JGBs

Apr 24  08:30  Holland  Eur 1.5-2.5bn Jul 2014 & Jan 2037 DSL auction

Apr 24  08:30  Spain  3 & 6M T-bill auction

Apr 24  09:10  Italy   Auctions CTZ/BTPei

Apr 24  14:30  UK  Details Conventional Gilt auction on May 01 & I/L auction on May 03

Apr 24  17:00  US  Auctions 2Y Notes

Apr 25  09:10  Sweden  Auctions T-bills

Apr 25  09:30  Germany  Eur 3.0bn new Jul 2044 Bund

Apr 25  14:30  Sweden  Details nominal bond auction on May 02

Apr 25  17:00  US  Auctions 5Y Notes

Apr 26  00:30  Japan  Auctions 2Y JGBs

Apr 26  09:10  Italy   BOT auction

Apr 26  14:30  Sweden  Details I/L bond auction on May 03

Apr 26  17:00  US  Auctions 7Y Notes

Apr 27  09:10  Italy   BTP/CCTeu auction

USD/CNY Weekly Fundamental Analysis April 23-27, 2012, Forecast

Introduction:  For years, other countries have been asking China to let the yuan, also called then renminbi, to float more freely on the currency market. It appears that China is doing that now, with an announcement that the yuan will be allowed to float more freely against the US dollar.

China announced that it will allow the yuan to float a little more freely against the US dollar, allowing the currency to move one per cent to either side of the US dollar currency peg. The yuan will not be a truly free floating currency as a result of the new policy, but it will have a little more flexibility.

For years, Western countries, especially the United States, have charged that the Chinese undervalue their currency, keeping it artificially low against the US dollar. This allows for an edge in exports, as a weaker yuan makes goods cheaper to purchase by consumers in other countries. Many expect that if Chinese policymakers were to ever let the yuan freely float, it would appreciate quite quickly.

Weekly Analysis and Recommendation:

The USD/CNY closed the week at 6.3047 after bouncing around all week on worries over Chinese and US economic recovery. The yuan traded as low as 6.2924 and hit a high of 6.3202.

As the weekends, worries over Euro Zone debt and economic growth in the US and China continue to grip commodities and were seen trading in a very tight range waiting for fresh cues for further directional moves. In a lackluster trading, spot gold held steady. Base metals in LME traded mostly flat as investors remained cautious after weak economic indicators from the U.S. Though, successful French and Spanish bond auction allayed concerns over Euro Zone’s deteriorating financial health to some extent. Unexpected rise in German business climate assessed by Ifo lifted the sentiments too. LME copper managed to hang above $8000 a ton.  In tandem with the international market, movements in MCX base metal complex and bullions were dreary.  Crude oil rose for the first time in three days supported by positive German data. Meanwhile, G-20 finance ministers and central bankers are to meet in Washington later today. The Indian rupee was seen bouncing off a 3-month low it hit during previous session at 52.11 up 0.17 percent

Market emotions remained rather subdued in the wake of persistent debt concerns in the Euro region in spite of a strong German business sentiment. Looking into the evening, no major economic data is slated for release. The ongoing G-20 finance minister’s meet in Washington would be the key event markets would be looking up to take cues from.  With Chinese economy going through a lean patch, possible Chinese Central bank liquidity action in the coming days could be a marquee event and have a real impact on the commodities.

The manager of China’s massive foreign exchange reserves and lenders are working together to ease funding for overseas investments. But major state-owned enterprises are preferred and financing is only available for projects that fit the government’s “going out” strategy

China’s yuan meanwhile took a slight drop lower against the dollar after the country’s central bank widened the daily trading band for the closely-controlled currency to 1.0 percent above and below a daily midpoint, double the previous 0.5 percent.

The operator of Hong Kong’s stock and futures exchange said late Thursday it plans to introduce offshore yuan futures in the third quarter to provide a way for investors to hedge their exposure to the Chinese currency.

The number of Americans who filed requests for jobless benefits totaled 386,000 last week, keeping claims at a four-month high, the U.S. Labor Department said Thursday. Claims from two weeks ago were revised up to 388,000 from an initial reading of 380,000. Economists had projected claims would drop to a seasonally adjusted 374,000 in the week ended April 14, so the number is likely to disappoint investors. The average of new claims over the past four weeks, meanwhile, rose by 5,500 to 374,750, the highest level since late January. Continuing claims increased by 26,000 to a seasonally adjusted 3.3 million in the week ended April 7, the Labor Department said. 

Sales of existing homes fell 2.6% in March, the second monthly drop though the sales pace in the first quarter was the best in five years, according to data released Thursday. The National Association of Realtors said.

 A gradual improvement in U.S. economic growth is expected past the summer, the Conference Board said Thursday as it reported that its index of leading economic indicators increased 0.3% in March, led by the interest rate spread.

Economic Highlights of the coming week that affect the Yuan, Yen, Aussie and Kiwi

 AUD

 

CPI (QoQ)

 

0.6%

 

 

 

 AUD

 

Trimmed Mean CPI (QoQ)

 

0.6%

0.6%

 

 

 USD

 

New Home Sales

 

320K

313K

 

 

 USD

 

CB Consumer Confidence

 

70.3

70.8

 

 

 USD

 

Durable Goods Orders (MoM)

 

-1.5%

2.4%

 

 

 USD

 

Core Durable Goods Orders (MoM)

 

0.5%

1.8%

 

 

 USD

 

Interest Rate Decision

 

 

 

 

 

 NZD

 

Interest Rate Decision

 

2.50%

2.50%

 

 

 JPY

 

Tokyo Core CPI (YoY)

 

-0.4%

-0.3%

 

 

 JPY

 

Unemployment Rate

 

4.5%

4.5%

 

 

 JPY

 

Retail Sales (YoY)

 

9.8%

3.5%

 

 

 JPY

 

Interest Rate Decision

 

 

0.10%

 

 

 

USD/CNY Fundamental Analysis April 23, 2012 Forecast

Analysis and Recommendation: (close of Asian session)

The USD/CNY is trading at 6.3057 slightly up in the Asian session today recovering some lost ground.

Investors will be looking to this weekend’s Group of 20 nations, International Monetary Fund, and World Bank meetings in Washington DC for clarity on how policymakers plan to deal with Europe’s debt crisis.

Weak US data also added to investors’ pessimism.

Figures showed sales of previously owned US homes in March unexpectedly fell, while more Americans than forecast filed applications for unemployment benefits last week. Another report showed manufacturing in the Philadelphia region expanded at a slower pace in April as orders and sales cooled.

Economic Data for April 19 & 20, 2012 actual v. forecast

 

08:30

 

EUR

 

 

 

Dutch Unemployment Rate 

5.90%

 

6.00% 

 

5.90% 

   

 

09:30

 

EUR

 

 

 

Spanish 10-Year Obligacion Auction 

5.743%

 

 

 

5.338% 

 

 

 

13:10

 

CAD

 

 

 

BoC Gov Carney Speaks 

 

 

 

 

 

 

 

 

13:30

 

USD

 

 

 

Initial Jobless Claims 

386K

 

370K 

 

388K 

   

 

13:30

 

USD

 

 

 

Continuing Jobless Claims 

3297K

 

3280K 

 

3271K 

   

 

15:00

 

USD

 

 

 

Existing Home Sales 

4.48M

 

4.62M 

 

4.60M 

   

 

15:00

 

USD

 

 

 

Philadelphia Fed Manufacturing Index 

8.5

 

12.0 

 

12.5 

 

 

Apr. 20

00:50

 

JPY

 

 

 

Tertiary Industry Activity Index (MoM) 

0.0%

 

0.8% 

 

-0.6% 

   

Economic Events scheduled for April 23, 2012 that affect the NZD, AUD, and JPY

01:30:00               AUD       Producer Price Index (QoQ)                                                                        0.30%

The Producer Price Index released by the Australian Bureau of Statisticsmeasures the average changes in prices in the Australian markets by producers of commodities. Changes in the PPI are widely followed as an indicator of commodity inflation. A high reading is seen as positive (or bullish) for the AUD, whereas a low reading is seen as negative (or bearish).

 01:30:00              AUD       Producer Price Index (YoY)                                                                          2.90%

The Producer Price Index released by the Statistics measures the average changes in prices in the Australian markets by producers of commodities. Changes in the PPI are widely followed as an indicator of commodity inflation. A high reading is seen as positive (or bullish) for the AUD, whereas a low reading is seen as negative (or bearish).

Government Bond Auctions (this week)

Apr 23-27  n/a  UK  Re-opened 3.75% 2052 Conventional Gilt syndication (further details tba)

Apr 23  09:30  Germany  Eur 3.0bn new Apr 2013 (12M) Bubill

Apr 23  10:00  Belgium  OLO Auction cancelled

Apr 23  15:30  Italy   Details BTP/CCTeu on Apr 27

Apr 24  00:30  Japan  Auctions 20Y JGBs

Apr 24  08:30  Holland  Eur 1.5-2.5bn Jul 2014 & Jan 2037 DSL auction

Apr 24  08:30  Spain  3 & 6M T-bill auction

Apr 24  09:10  Italy   Auctions CTZ/BTPei

Apr 24  14:30  UK  Details Conventional Gilt auction on May 01 & I/L auction on May 03

Apr 24  17:00  US  Auctions 2Y Notes

Apr 25  09:10  Sweden  Auctions T-bills

Apr 25  09:30  Germany  Eur 3.0bn new Jul 2044 Bund

Apr 25  14:30  Sweden  Details nominal bond auction on May 02

Apr 25  17:00  US  Auctions 5Y Notes

Apr 26  00:30  Japan  Auctions 2Y JGBs

Apr 26  09:10  Italy   BOT auction

Apr 26  14:30  Sweden  Details I/L bond auction on May 03

Apr 26  17:00  US  Auctions 7Y Notes

Apr 27  09:10  Italy   BTP/CCTeu auction

USD/CNY Fundamental Analysis April 20, 2012 Forecast

Analysis and Recommendation: (close of Asian session)

The USD/CNY is at 6.3062 with the greenback moving up some 53 pips with the spot market open brining a bid into USDCNY to push it well above the 6.30 level. We mentioned yesterday the attractiveness of playing a steepening in the NDF curve via along 12 month USDCNY, short 3mth USDCNY position. We will  have see this trade move further over the past 24 hours and would recommend looking at an initial target spread of ‐330 pips between the 3mth NDF and 12mth NDF as the market continues to fret about China’s economy, and the longer term implications of a more variable onshore renminbi regime.  

Economic Data for April 18 & 19, 2012 actual v. forecast

 

GBP

 

 

 

Average Earnings Index +Bonus 

1.1%

 

1.3% 

 

1.3% 

 

 

 

GBP

 

 

 

Claimant Count Change 

3.6K

 

7.0K 

 

4.5K 

   

 

GBP

 

 

 

MPC Meeting Minutes 

 

 

 

 

 

 

 

 

NZD

 

 

 

CPI (QoQ) 

0.5%

 

0.6% 

 

-0.3% 

 

 

Apr. 19

JPY

 

 

 

Trade Balance 

-0.62T

 

-0.43T 

 

-0.32T 

   

 

AUD

 

 

 

NAB Quarterly Business Confidence 

-1.00

 

 

 

1.00 

 

 

 

Economic Events scheduled for April 20, 2012 that affect the NZD, AUD, and JPY

13:00:00                               G20 Meeting                    

Government Bond Auction Schedule:

Apr 20  15:30  Italy   Details CTZ/BTPei on Apr 24 & BOT on Apr 26

Apr 23-27  n/a  UK  Re-opened 3.75% 2052 Conventional Gilt syndication (further details tba)

Apr 23  09:30  Germany  Eur 3.0bn new Apr 2013 (12M) Bubill

Apr 23  10:00  Belgium  OLO Auction cancelled

Apr 23  15:30  Italy   Details BTP/CCTeu on Apr 27

Apr 24  00:30  Japan  Auctions 20Y JGBs

Apr 24  08:30  Holland  Eur 1.5-2.5bn Jul 2014 & Jan 2037 DSL auction

Apr 24  08:30  Spain  3 & 6M T-bill auction

Apr 24  09:10  Italy   Auctions CTZ/BTPei

Apr 24  14:30  UK  Details Conventional Gilt auction on May 01 & I/L auction on May 03

Apr 24  17:00  US  Auctions 2Y Notes

Apr 25  09:10  Sweden  Auctions T-bills

Apr 25  09:30  Germany  Eur 3.0bn new Jul 2044 Bund

Apr 25  14:30  Sweden  Details nominal bond auction on May 02

Apr 25  17:00  US  Auctions 5Y Notes

Apr 26  00:30  Japan  Auctions 2Y JGBs

Apr 26  09:10  Italy   BOT auction

Apr 26  14:30  Sweden  Details I/L bond auction on May 03

Apr 26  17:00  US  Auctions 7Y Notes

Apr 27  09:10  Italy   BTP/CCTeu auction

USD/CNY Fundamental Analysis April 19 , 2012 Forecast

Analysis and Recommendation: (close of Asian session)

 The USD/CNY stood at 6.3163 to the dollar against a close of 6.3030, with the weakening blamed on worries over the country’s slowing economy.

China’s yuan meanwhile took a slight drop lower against the dollar after the country’s central bank widened the daily trading band for the closely-controlled currency to 1.0 percent above and below a daily midpoint, double the previous 0.5 percent.

Despite arguments, especially from Washington, that the yuan is undervalued, Lu Ting, China economist for Bank of America, said: “The consensus in Beijing is that the room for appreciation seems quite limited.”

Economic Reports for April 17, 2012 actual v. forecast

Apr. 17

 

AUD

 

 

 

Monetary Policy Meeting Minutes 

 

 

 

 

 

 

 

 

 

JPY

 

 

 

Industrial Production (MoM) 

-1.6%

 

-1.2% 

 

-1.2% 

 

 

 

 

INR

 

 

 

Indian Interest Rate Decision 

8.00%

 

8.30% 

 

8.50% 

 

 

 

 

GBP

 

 

 

Core CPI (YoY) 

2.5%

 

2.4% 

 

2.4% 

 

 

 

 

GBP

 

 

 

CPI (YoY) 

3.5%

 

3.5% 

 

3.4% 

 

 

 

 

GBP

 

 

 

CPI (MoM) 

0.3%

 

0.3% 

 

0.6% 

 

 

 

 

EUR

 

 

 

CPI (YoY) 

2.7%

 

2.6% 

 

2.6% 

 

 

 

 

EUR

 

 

 

German ZEW Economic Sentiment 

23.4

 

20.0 

 

22.3 

 

 

 

 

EUR

 

 

 

ZEW Economic Sentiment 

13.1

 

10.7 

 

11.0 

 

 

 

 

EUR

 

 

 

Core CPI (YoY) 

1.6%

 

 

 

1.5% 

 

 

 

 

USD

 

 

 

Building Permits 

0.747M

 

0.710M 

 

0.715M 

 

 

 

 

USD

 

 

 

Housing Starts 

0.654M

 

0.705M 

 

0.694M 

   

 

 

CAD

 

 

 

Manufacturing Sales (MoM) 

-0.30%

 

-1.00% 

 

-1.30% 

   

 

 

EUR

 

 

 

ECB President Draghi Speaks 

 

 

 

 

 

 

 

 

 

CAD

 

 

 

Interest Rate Decision 

1.00%

 

1.00% 

 

1.00% 

 

 

 

 

USD

 

 

 

Industrial Production (MoM) 

0.0%

 

0.3% 

 

0.0% 

   

 

Economic Events scheduled for April 19, 2012 that affect the NZD, AUD, and JPY

01:30:00               AUD       National Australia Bank’s Business Confidence                 3

The National Australia Bank Business Confidence is a survey of the current business condition in Australia. It indicates the performance of the overall Australian economy in a short-term view. A positive economic growth anticipates bullish movements for the AUD, whereas a negative growth is seen as bearish.

14:00:00               USD       Existing Home Sales (MoM)                                           4.63M   4.59M

The Existing Home Sales, released by the National Association of Realtorsprovide an estimated value of housing market conditions. As the housing market is considered as a sensitive factor to the US economy, it generates some volatility for the USD. Generally speaking, a high reading is positive for the Dollar, while a low reading is negative.

 14:00:00              USD       Philadelphia Fed Manufacturing Survey                     12.2        12.5

The Philadelphia Fed Survey is a spread index of manufacturing conditions (movements of manufacturing) within the Federal Reserve Bank of Philadelphia. This survey, served as an indicator of manufacturing sector trends, is interrelated with the ISM manufacturing Index (Institute for Supply Management) and the index of industrial production. It is also used as a forecast of The ISM Index. Generally, an above-the-expectations reading is seen as positive for the USD.

 23:50:00              JPY         Tertiary Industry Index (MoM)                                  0.80%    -1.70%

Tertiary Industry Index released by the Ministry of Economy, Trade and Industry indicates the domestic service sector in Japan such as information and communication, electricity, gas heat and water, services, transport, wholesale and retail trade, finance and insurance ,and welfare. As the Japanese economy relies upon its exports, this event is expected to generate low volatility for the JPY. Generally, a high reading is positive (or bullish) for the JPY, while a low reading is negative (or bearish).

Government Bond Auctions (this week)

Apr 19  08:30  Spain  Obligacion auction

Apr 19  08:50  France  BTAN auction

Apr 19  09:30  UK  Auctions 0.125% I/L Gilt 2029

Apr 19  09:50  France  OATi auction

USD/CNY Fundamental Analysis April 18, 2012 Forecast

Analysis and Recommendation: (close of Asian session)

The USD/CNY is trading at 6.3029 slightly down as the USD weakened towards the end of the US trading session on lackluster results in two economic leading indicators. Investors continue to question the strength of the US recovery. Earlier, retail sales were reported well above forecast as markets shot upwards.

 CNY has fallen 0.2% vs the USD in its first trading session since the widening of the trading band from 0.5% to 1.0%.   Chinese policymakers last widened the band, from 0.3% to 0.5%, in May 2007 at a time when the yuan was considered to be undervalued vs the USD.  Since then, CNY has appreciated against the USD by 20.3% and China’s trade surpluses have declined in both absolute and relative terms (as a % of GDP).   

Economic Reports for April 16-17, 2012 actual v. forecast

 

13:30

 

USD

 

 

 

Core Retail Sales (MoM) 

0.8%

 

0.6% 

 

0.9% 

 

 

 

13:30

 

CAD

 

 

 

Foreign Securities Purchases 

12.50B

 

7.23B 

 

-4.28B 

   

 

13:30

 

USD

 

 

 

Retail Sales (MoM) 

0.8%

 

0.3% 

 

1.0% 

   

 

13:30

 

USD

 

 

 

NY Empire State Manufacturing Index 

6.6

 

18.0 

 

20.2 

 

 

 

14:00

 

USD

 

 

 

TIC Net Long-Term Transactions 

10.1B

 

41.3B 

 

102.4B 

   

Apr. 17

02:30

 

AUD

 

 

 

Monetary Policy Meeting Minutes 

 

 

 

 

 

 

 

 

05:30

 

JPY

 

 

 

Industrial Production (MoM) 

-1.6%

 

-1.2% 

 

-1.2% 

 

 

 

06:30

 

INR

 

 

 

Indian Interest Rate Decision 

8.00%

 

8.30% 

 

8.50% 

 

 

 

Economic Events scheduled for April 18, 2012 that affect the NZD, AUD, and JPY

00:30:00               AUD       Conference Board Australia Leading Index                                          1.10%

The Conference Board Australia leading Index released by the Conference Board measures future trends of the overall economic activity including employment, average manufacturing workweek, initial claims, permits for new housing construction, stock prices and yield curve. It forecasts short to mid-term growth in the Australian economy. Generally, a high reading is seen as positive (or bullish) for the AUD, while a low reading is seen as negative (or bearish).

22:45:00               NZD       Consumer Price Index (QoQ)                                                     0.60%    -0.30%

Consumer Price Index released by the Statistics New Zealand is a measure of price movements by the comparison between the retail prices of a representative shopping basket of goods and services . The purchase power of NZD is dragged down by inflation. The CPI is a key indicator to measure inflation and changes in purchasing trends. A high reading is seen as positive (or bullish) for the NZD, while a low reading is seen as negative.

23:50:00               JPY         Merchandise Trade Balance Total                            Â¥-220.0B        Â¥32.9B

The Merchandise Trade Balance Total released by the Ministry of Finance is a measure of balance amount between import and export. A positive value shows a trade surplus while a negative value shows a trade deficit. Japan is so much dependant on exports that the Japanese economy heavily relies on a trade surplus. Therefore, any variation in the figures influences the domestic economy. If a steady demand in exchange for Japanese exports is seen, that

Government Bond Auctions (this week)

Apr 18  09:10  Sweden  Nominal bond auction

Apr 18  09:30  Germany  Eur 5.0bn 0.25% Mar 2014 Schatz

Apr 18  14:30  Sweden  Details T-bill auction on Apr 25

Apr 19  08:30  Spain  Obligacion auction

Apr 19  08:50  France  BTAN auction

Apr 19  09:30  UK  Auctions 0.125% I/L Gilt 2029

Apr 19  09:50  France  OATi auction

USD/CNY Fundamental Analysis April 17, 2012 Forecast

Analysis and Recommendation: (close of Asian session)

The USD/CNY  has climbed in today’s trading to 6.3129 moving off the low of 6.2987 as the USD picked up momentum. Continued worries over the slowdown in China and growing debt in Spain and Italy, investors continued to move to safety. Although the numbers in the US have been mixed and confusing, there is no doubt that the economy is improving. The worries about China, are the longer term effects of the continued economic problems in Europe.

The currency fluctuation may also be a result of the new flexibility of the Chinese currency.

The Chinese government announced on Saturday that it would allow the renminbi to vary more in value against the dollar during each day’s trading, but gave no hint that it would accept the Obama administration’s demands to allow the currency to show a longer-term trend of appreciation against the dollar.

Economic Data Released on April 13, 2012 actual v. forecast

 

JPY

 

 

 

Monetary Policy Meeting Minutes 

 

 

 

 

 

 

 

 

KRW

 

 

 

South Korean Interest Rate Decision 

3.25%

 

3.25% 

 

3.25% 

 

 

 

CNY

 

 

 

Chinese Fixed Asset Investment (YoY) 

20.9%

 

20.8% 

 

21.5% 

 

 

 

CNY

 

 

 

Chinese GDP (YoY) 

8.1%

 

8.3% 

 

8.9% 

 

 

 

CNY

 

 

 

Chinese Industrial Production (YoY) 

11.9%

 

11.5% 

 

11.4% 

 

 

 

CNY

 

 

 

Chinese Retail Sales (YoY) 

15.2%

 

15.0% 

 

14.7% 

 

 

 

EUR

 

 

 

German CPI (MoM) 

0.3%

 

0.3% 

 

0.3% 

 

 

 

EUR

 

 

 

Finnish CPI (YoY) 

2.90%

 

 

 

3.10% 

 

 

 

GBP

 

 

 

PPI Input (MoM) 

1.9%

 

1.2% 

 

2.5% 

   

 

BRL

 

 

 

Brazilian Retail Sales (YoY) 

9.6%

 

9.0% 

 

7.3% 

 

 

 

PLN

 

 

 

Polish CPI (YoY) 

3.9%

 

3.9% 

 

4.3% 

 

 

 

USD

 

 

 

Core CPI (MoM) 

0.2%

 

0.2% 

 

0.1% 

 

 

 

USD

 

 

 

CPI (MoM) 

0.3%

 

0.3% 

 

0.4% 

 

 

 

USD

 

 

 

Michigan Consumer Sentiment Index 

75.7

 

76.2 

 

76.2 

 

 

 

USD

 

 

 

Fed Chairman Bernanke Speaks 

 

 

 

 

 

   

 

Economic Events scheduled for April 17, 2012 that affect the NZD, AUD, and JPY

05:30     JPY         Industrial Production (MoM)                                                                     -1.2%    

Industrial Production measures the change in the total inflation-adjusted value of output produced by manufacturers, mines, and utilities.                                        

13:30     USD      Building Permits                                                              0.71M                   0.71M    

Building Permits measures the change in the number of new building permits issued by the government. Building permits are a key indicator of demand in the housing market.    

13:30     USD      Housing Starts                                                                 0.70M                   0.70M  

Housing starts measures the change in the annualized number of new residential buildings that began construction during the reported month. It is a leading indicator of strength in the housing sector.   

14:15     USD      Industrial Production (MoM)                                         0.5%       

Industrial Production measures the change in the total inflation-adjusted value of output produced by manufacturers, mines, and utilities.

Government Bond Auctions (this week)

Apr 17  08:30  Spain  12 & 18M T-bill auction

Apr 17  09:30  Belgium  Auctions 3 & 12M T-bills

Apr 18  09:10  Sweden  Nominal bond auction

Apr 18  09:30  Germany  Eur 5.0bn 0.25% Mar 2014 Schatz

Apr 18  14:30  Sweden  Details T-bill auction on Apr 25

Apr 19  08:30  Spain  Obligacion auction

Apr 19  08:50  France  BTAN auction

Apr 19  09:30  UK  Auctions 0.125% I/L Gilt 2029

Apr 19  09:50  France  OATi auction

USD/CNY Weekly Fundamental Analysis April 16-20, 2012, Forecast

Analysis and Recommendations:

The USD/CNY ended the week at 6.2983 down from a high of 6.3236. The yuan fell against the dollar in early week trading as disappointing data was released from China last Sunday showing a slowdown in orders and production. By midweek, the yuan had regained strength against the USD, until Chinese GDP figures were released early Friday morning. The USD regained some strength until late Friday when the US disappointed investors with a drop in consumer confidence and a rise in inflation. The Chinese currency was able to pick up some steam. The yuan moved from a low of 6.3088 to close the week at 6.2983

Date

Last

Open

High

Low

Change %

04/13/2012

6.2983

6.3068

6.3088

6.2913

-0.13%

04/12/2012

6.3068

6.3078

6.3236

6.2984

-0.02%

04/11/2012

6.3078

6.3105

6.3123

6.3027

-0.04%

04/10/2012

6.3105

6.3077

6.3122

6.3060

0.04%

04/09/2012

6.3077

6.3075

6.3103

6.3036

0.00%

 

Major Economic Events for the past week actual v. forecast

Apr. 09

 

CNY

 

 

 

Chinese CPI (YoY) 

3.6%

 

3.3% 

 

3.2% 

 

 

Apr. 10

 

USD

 

 

 

Fed Chairman Bernanke Speaks 

 

 

 

 

 

 

 

 

 

JPY

 

 

 

Interest Rate Decision 

0.10%

 

0.10% 

 

0.10% 

 

 

 

 

JPY

 

 

 

BoJ Press Conference 

 

 

 

 

 

 

 

Apr. 12

 

CAD

 

 

 

Trade Balance 

0.3B

 

2.0B 

 

2.0B 

   

 

 

USD

 

 

 

Trade Balance 

-46.0B

 

-52.0B 

 

-52.5B 

   

 

 

USD

 

 

 

Initial Jobless Claims 

380K

 

355K 

 

367K 

   

Apr. 13

 

CNY

 

 

 

Chinese GDP (YoY) 

8.1%

 

8.3% 

 

8.9% 

 

 

 

 

USD

 

 

 

Core CPI (MoM) 

0.2%

 

0.2% 

 

0.1% 

 

 

 

 

USD

 

 

 

CPI (MoM) 

0.3%

 

0.3% 

 

0.4% 

 

 

 

Economic Highlights of the coming week that affect the Yen, the Aussie, the Kiwi and the Chinese Yuan

Apr. 17

05:30

 

JPY

 

 

 

Industrial Production (MoM) 

 

 

 

 

-1.2% 

 

 

 Apr. 18 

23:45

 

NZD

 

 

 

CPI (QoQ) 

       

    -0.3% 

   

 

Economic Highlights of the coming week that affect the US Dollar

Apr. 16 

13:30

 

USD

 

 

 

Core Retail Sales (MoM) 

 

 

0.6% 

 

0.9% 

 

 

 

13:30

 

USD

 

 

 

Retail Sales (MoM) 

 

 

0.4% 

 

1.1% 

 

 

 

13:30

 

USD

 

 

 

NY Empire State Manufacturing Index 

 

 

21.1 

 

20.2 

 

 

 

14:00

 

USD

 

 

 

TIC Net Long-Term Transactions 

 

 

 

 

101.0B 

 

 

Apr. 17 

13:30

 

USD

 

 

 

Building Permits 

 

 

0.71M 

 

0.71M 

 

 

 

13:30

 

USD

 

 

 

Housing Starts 

 

 

0.70M 

 

0.70M 

 

 

 

14:15

 

USD

 

 

 

Industrial Production (MoM) 

 

 

0.5% 

 

 

   

 

The Chinese Dragon Slows Down

The Chinese economy grew by 8.1 %in the first three months of 2012, its slowest pace in nearly three years, as domestic demand fell and Europe’s woes curbed business activity.

Gross domestic product grew at its slowest pace since the second quarter of 2009 in the three months to the end of March, the National Bureau of Statistics said today.

The report marked the fifth consecutive quarterly slowdown for the world’s second-largest economy, there was now “enormous” pressure on exports.

Output from China’s millions of factories and workshops rose 11.6 per cent in the first three months of this year, compared with growth of 15.7 per cent a year earlier.

The figure is likely to fuel concerns about China’s vast manufacturing sector, which has been hurt by falling demand for Chinese products in crisis-hit Europe.

China’s annual growth slowed to 9.2 per cent last year from 10.4 per cent in 2010, as turbulence in Europe and the United States hit the export-driven economy.

Analysts expect growth to rebound in the second half of this year as Europe’s economic outlook brightens and China’s loosening measures kick in, allowing greater credit access for small businesses.

China cut its economic growth target to 7.5 per cent this year, from eight per cent last year, in an official acknowledgment that the export-driven economy is slowing.

Over the past few months Beijing has pledged to “fine-tune” policy to prevent a hard landing for the economy, which could trigger widespread job losses and spark social unrest.

China’s central bank in February cut the amount of cash banks must hold in reserve for the second time in three months as policymakers moved to increase lending and boost domestic consumption, and analysts expect further cuts in the coming months.

Retail sales, the main gauge of consumer spending, rose 14.8 per cent in the first three months of 2012.

Fixed asset investments, a key measure of government spending on infrastructure, rose 20.9 per cent in the first quarter of 2012 compared with a year earlier.

The government also introduced a string of measures to help its struggling small businesses and pledged to support its export sector.

China’s manufacturing activity fell to a four-month low in March according to HSBC, and imports slowed to 5.3 per cent.

However, the Communist government is not expected to loosen its grip on the housing sector which has seen prices more than double in many cities.

These dismal reports have stoked worries in global markets, not only for China. Many of the pan-asian neighbors depend on trade and export to China for their economic growth. A slowdown in China will have rippling effects on the surrounding countries.

USD/CNY Fundamental Analysis April 16, 2012 Forecast

Analysis and Recommendation: (close of Asian session)

 The USD/CNY is trading at 6.2982 down 0.0076. China today released numerous economic data reports. Most showed an ongoing slowdown in the Chinese economy.

China’s economic growth fell to its lowest level in nearly three years in the first quarter of 2012 amid weak trade and lending controls.

The government reported on Friday the world’s second-largest economy grew by 8.1 per cent in the three months ending in March, its weakest expansion since the second quarter of 2009.

China’s growth has slowed steadily since mid-2010 as global demand for its exports weakened and the Beijing government tightened lending and investment curbs to cool an overheated economy and politically dangerous inflation.

This negative data offset the disappointing jobs reports in the US, but should still continue to weaken the Chinese currency.

Economic Reports for April 12-13, 2012 actual v. forecast

 

 

SEK

 

 

 

Swedish CPI (YoY) 

1.5%

 

1.5% 

 

1.9% 

 

 

 

 

EUR

 

 

 

Dutch Retail Sales (YoY) 

0.90%

 

 

 

0.80% 

 

 

 

 

EUR

 

 

 

ECB Monthly Report 

 

 

 

 

 

 

 

 

 

GBP

 

 

 

Trade Balance 

-8.8B

 

-7.7B 

 

-7.9B 

   

 

 

EUR

 

 

 

Industrial Production (MoM) 

0.5%

 

-0.3% 

 

0.0% 

   

 

 

EUR

 

 

 

Portuguese CPI (MoM) 

1.20%

 

 

 

0.10% 

 

 

 

 

EUR

 

 

 

Greek Unemployment Rate 

21.80%

 

 

 

21.20% 

   

 

 

USD

 

 

 

Core PPI (MoM) 

0.3%

 

0.2% 

 

0.2% 

 

 

 

 

USD

 

 

 

PPI (MoM) 

0.0%

 

0.3% 

 

0.4% 

 

 

 

 

CAD

 

 

 

Trade Balance 

0.3B

 

2.0B 

 

2.0B 

   

 

 

USD

 

 

 

Trade Balance 

-46.0B

 

-52.0B 

 

-52.5B 

   

 

 

USD

 

 

 

Initial Jobless Claims 

380K

 

355K 

 

367K 

   

 

 

USD

 

 

 

Continuing Jobless Claims 

3251K

 

3335K 

 

3349K 

   

Apr. 13

 

KRW

 

 

 

South Korean Interest Rate Decision 

3.25%

 

3.25% 

 

3.25% 

 

 

 

 

CNY

 

 

 

Chinese Fixed Asset Investment (YoY) 

20.9%

 

20.8% 

 

21.5% 

 

 

 

 

CNY

 

 

 

Chinese GDP (YoY) 

8.1%

 

8.3% 

 

8.9% 

 

 

 

 

CNY

 

 

 

Chinese Industrial Production (YoY) 

11.9%

 

11.5% 

 

11.4% 

 

 

 

 

CNY

 

 

 

Chinese Retail Sales (YoY) 

15.2%

 

15.0% 

 

14.7% 

 

 

 


Economic Events for April 16, 2012         

13:30     USD      Core Retail Sales (MoM)                                             0.6%                      0.9%

Core Retail Sales measures the change in the total value of sales at the retail level in the U.S., excluding automobiles. It is an important indicator of consumer spending and is also considered as a pace indicator for the U.S. economy.   

13:30     USD      Retail Sales (MoM)                                                        0.4%                      1.1%

Retail Sales measure the change in the total value of inflation-adjusted sales at the retail level. It is the foremost indicator of consumer spending, which accounts for the majority of overall economic activity.

13:30     USD      NY Empire State Manufacturing Index                    21.1                       20.2

The Empire State Manufacturing Index rates the relative level of general business conditions New York state. A level above 0.0 indicates improving conditions, below indicates worsening conditions. The reading is compiled from a survey of about 200 manufacturers in New York state.

14:00     USD      TIC Net Long-Term Transactions                                                               101.0B

Treasury International Capital (TIC) Net Long-Term Transactions measures the difference in value between foreign long-term securities purchased by U.S. citizens and U.S. long-term securities purchased by foreign investors. Demand for domestic securities and currency demand are directly linked because foreigners must buy the domestic currency to purchase the nation’s securities.

Government Bond Auctions (this week)

Apr 16-30 n/a  UK Re-opened 3.75% 2052 Conventional Gilt syndication

Apr 16  09:10  Slovakia  Auctions floating rate Nov 2016 & 4.35% Oct 2025 & Bonds

Apr 16  09:10  Norway  T-bill auction

Apr 17  08:30  Spain  12 & 18M T-bill auction

Apr 17  09:30  Belgium  Auctions 3 & 12M T-bills

Apr 18  09:10  Sweden  Nominal bond auction

Apr 18  09:30  Germany  Eur 5.0bn 0.25% Mar 2014 Schatz

Apr 18  14:30  Sweden  Details T-bill auction on Apr 25

Apr 19  08:30  Spain  Obligacion auction

Apr 19  08:50  France  BTAN auction

Apr 19  09:30  UK  Auctions 0.125% I/L Gilt 2029

Apr 19  09:50  France  OATi auction

USD/CNY Fundamental Analysis April 13, 2012 Forecast

Analysis and Recommendation: (close of Asian session)

 The USD/CNY is trading at 6.3063 with little movement. The pair is currently rangebound

The World Bank has lowered its forecasts for China’s economic growth this year to 8.2%, from 8.4%, supporting the view that China is heading for its slowest annual growth in a decade, but activity is expected to pick up next year to 8.6%.

In its latest monthly review of the US economy, the Beige Book, the Fed said the economy maintained growth in all 12 of the central bank’s regions. Manufacturing, hiring and retail sales all showed signs of strength even amid rising fuel prices.

Economic Reports for April 11-12, 2012 actual v. forecast

 

 

EUR

 

 

 

German 10-Year Bund Auction 

1.770%

 

 

 

1.830% 

 

 

 

 

CAD

 

 

 

Housing Starts 

216K

 

200K 

 

205K 

   

 

 

USD

 

 

 

Import Price Index (MoM) 

1.3%

 

0.8% 

 

-0.1% 

   

 

 

MXN

 

 

 

Mexican Industrial Production (YoY) 

5.9%

 

4.3% 

 

4.2% 

 

 

 

 

USD

 

 

 

10-Year Note Auction 

2.043%

 

 

 

2.076% 

 

 

 

 

USD

 

 

 

Beige Book 

 

 

 

 

 

 

 

 

 

USD

 

 

 

Federal Budget Balance 

-198.2B

 

-196.0B 

 

-232.0B 

 

 

Apr. 12

 

KRW

 

 

 

South Korean Unemployment Rate 

3.4%

 

3.5% 

 

3.7% 

 

 

 

 

AUD

 

 

 

Employment Change 

44.0K

 

6.0K 

 

-15.4K 

 

 

 

 

AUD

 

 

 

Unemployment Rate 

5.2%

 

5.3% 

 

5.2% 

 

 

 

 

EUR

 

 

 

French CPI (MoM) 

0.8%

 

0.6% 

 

0.4% 

 

 

 

 

INR

 

 

 

Indian Industrial Production (YoY) 

4.1%

 

6.6% 

 

1.1% 

   

Economic Events for April 13, 2012 that affect the AUD, NZD, JPY and CNY

00:50     JPY        Monetary Policy Meeting Minutes

The Monetary Policy Meeting Minutes are a detailed record of the Bank of Japan’s policy setting meeting, containing in-depth insights into the economic conditions that influenced the decision on where to set interest rates.                                                                                                              

03:00     CNY      Chinese Fixed Asset Investment      20.8%                   21.5%

Chinese Fixed Asset Investment measures the change in the total spending on non-rural capital investments such as factories, roads, power grids, and property.                      

03:00     CNY       Chinese GDP (YoY)                              8.3%                      8.9%

Gross Domestic Product (GDP) measures the annualized change in the inflation-adjusted value of all goods and services produced by the economy. It is the broadest measure of economic activity and the primary indicator of the economy’s health.

03:00     CNY       Chinese Industrial Production       11.5%                   11.4%     

Industrial Production measures the change in the total inflation-adjusted value of output produced by manufacturers, mines, and utilities.

03:00     CNY       Chinese Retail Sales (YoY)           15.0%                   14.7%   

Retail Sales measure the change in the total value of inflation-adjusted sales at the retail level. It is the foremost indicator of consumer spending, which accounts for the majority of overall economic activity.      

13:30     USD       Core CPI (MoM)                               0.2%                     0.1%

13:30     USD      CPI (MoM)                                          0.3%                      0.4%

The Consumer Price Index (CPI) measures the change in the price of goods and services from the perspective of the consumer. It is a key way to measure changes in purchasing trends and inflation.                            

 14:55    USD      Michigan Consumer Sentiment   76.2                        76.2

The University of Michigan Consumer Sentiment Index rates the relative level of current and future economic conditions. There are two versions of this data released two weeks apart, preliminary and revised. The preliminary data tends to have a greater impact. The reading is compiled from a survey of around 500 consumers.

 18:00    USD       Fed Chairman Bernanke Speaks

Federal Reserve Chairman Ben Bernanke (February 2006 – January 2014) is to speak. As head of the Fed, which controls short term interest rates, he has more influence over the U.S. dollar’s value than any other person. Traders closely watch his speeches as they are often used to drop hints regarding future monetary policy

Government Bond Auctions  (this week)

Apr 13  10:00  Belgium  OLO mini bond auction

Apr 16-30 n/a  UK Re-opened 3.75% 2052 Conventional Gilt syndication

Apr 16  09:10  Slovakia  Auctions floating rate Nov 2016 & 4.35% Oct 2025 & Bonds

Apr 16  09:10  Norway  T-bill auction

Apr 17  08:30  Spain  12 & 18M T-bill auction

Apr 17  09:30  Belgium  Auctions 3 & 12M T-bills

Apr 18  09:10  Sweden  Nominal bond auction

Apr 18  09:30  Germany  Eur 5.0bn 0.25% Mar 2014 Schatz

Apr 18  14:30  Sweden  Details T-bill auction on Apr 25

Apr 19  08:30  Spain  Obligacion auction

Apr 19  08:50  France  BTAN auction

Apr 19  09:30  UK  Auctions 0.125% I/L Gilt 2029

Apr 19  09:50  France  OATi auction

 

USD/CNY Fundamental Analysis April 12, 2012 Forecast

Analysis and Recommendation: (close of Asian session)

 The USD/CNY is trading at 6.3072

China reports an unexpected trade surplus in March, swinging from a deficit a month earlier, and lifting the nation’s trade surplus for the first quarter to $670 million. 

China is likely to post a smaller trade surplus this year compared with last year’s $155.1 billion surplus, state television CCTV reported Tuesday, citing Director of the customs’ statistics department Zheng Yuesheng

Economic Reports for April 10-11, 2012 actual v. forecast that affect the AUD, NZD, CNY and JPY

   

USD

 

 

 

FOMC Member Fisher Speaks 

 

 

 

 

 

 

 

 

 

NZD

 

 

 

NZIER Business Confidence 

13

 

 

 

 

 

Apr. 11

 

AUD

 

 

 

Westpac Consumer Sentiment 

-1.60%

 

 

 

-5.00% 

 

 

 

 

AUD

 

 

 

Home Loans (MoM) 

-2.5%

 

-3.5% 

 

-1.1% 

   

 

 

JPY

 

 

 

BoJ Monthly Report 

 

 

 

 

 

 

 

 

Economic Events for April 12, 2012 for AUD, NZD,CNY and JPY

02:30     AUD      Employment Change                                    6.0K                       -15.4K                  

02:30     AUD      Unemployment Rate                                    5.3%                      5.2%

Employment Change measures the change in the number of people employed. Job creation is an important indicator of consumer spending. The Unemployment Rate measures the percentage of the total work force that is unemployed and actively seeking employment during the previous month. 

Government Bond Auctions April 10-20, 2012

Apr 12  09:10  Italy   BTP/CCTeu auction

Apr 12  09:30  UK  Gbp 2.0bn 4.25% Jun 2032 Conventional Gilt

Apr 12  15:00  US  Announces auction of 5Y TIPS on Apr 19

Apr 12  17:00  US  Auctions 30Y Bonds

Apr 13  10:00  Belgium  OLO mini bond auction

Apr 16-30 n/a  UK Re-opened 3.75% 2052 Conventional Gilt syndication

Apr 16  09:10  Slovakia  Auctions floating rate Nov 2016 & 4.35% Oct 2025 & Bonds

Apr 16  09:10  Norway  T-bill auction

Apr 17  08:30  Spain  12 & 18M T-bill auction

Apr 17  09:30  Belgium  Auctions 3 & 12M T-bills

Apr 18  09:10  Sweden  Nominal bond auction

Apr 18  09:30  Germany  Eur 5.0bn 0.25% Mar 2014 Schatz

Apr 18  14:30  Sweden  Details T-bill auction on Apr 25

Apr 19  08:30  Spain  Obligacion auction

Apr 19  08:50  France  BTAN auction

Apr 19  09:30  UK  Auctions 0.125% I/L Gilt 2029

Apr 19  09:50  France  OATi auction

Apr 19  15:00  US Announces 2Y Notes on Apr 24, 5Y Notes on Apr 25 & 7Y Notes on Apr 26

Apr 19  17:00  US  Auctions 5Y TIPS 

Apr 20  15:30  Italy   Details CTZ/BTPei on Apr 24 & BOT on Apr 26

USD/CNY Fundamental Analysis April 11, 2012 Forecast

Analysis and Recommendation: (close of Asian session)

 The USD/CNY is trading at 6.3084 as the USD lost ground after the negative employment reports

Chinese CPI rose 3.6 per cent in March from a year earlier, compared to a rise of 3.2 per cent in February.

Chinese balance of trade figures are expected on Tuesday, and gross domestic product data is due on Friday.

Economic Data for April 9-10, 2012 actual v. forecast

Apr. 09

 

JPY

 

 

 

Adjusted Current Account 

0.85T

 

0.66T 

 

0.14T 

   

 

 

CNY

 

 

 

Chinese CPI (YoY) 

3.6%

 

3.3% 

 

3.2% 

 

 

 

 

CNY

 

 

 

Chinese PPI (YoY) 

-0.3%

 

-0.2% 

 

0.0% 

 

 

 

 

JPY

 

 

 

Economy Watchers Current Index 

51.8

 

46.5 

 

45.9 

 

 

 

 

RUB

 

 

 

Russian Interest Rate Decision 

8.00%

 

8.00% 

 

8.00% 

 

 

 

 

TRY

 

 

 

Turkish Industrial Production (YoY) 

4.40%

 

3.50% 

 

1.50% 

 

 

 

 

TWD

 

 

 

Taiwanese Trade Balance 

2.36B

 

2.19B 

 

2.83B 

 

 

 

 

EUR

 

 

 

Greek CPI (YoY) 

1.70%

 

 

 

2.10% 

 

 

 

 

EUR

 

 

 

Greek Industrial Production (YoY) 

-8.30%

 

 

 

-5.00% 

 

 

 

 

EUR

 

 

 

Portuguese Trade Balance 

-2.88B

 

 

 

-3.08B 

 

 

 

 

USD

 

 

 

CB Employment Trends Index 

107.28

 

 

 

107.47 

   

 

 

USD

 

 

 

3-Month Bill Auction 

0.085%

 

 

 

0.075% 

 

 

 

 

USD

 

 

 

6-Month Bill Auction 

0.150%

 

 

 

0.140% 

 

 

Apr. 10

 

GBP

 

 

 

RICS House Price Balance 

-10%

 

-12% 

 

-13% 

 

 

 

 

USD

 

 

 

Fed Chairman Bernanke Speaks 

 

 

 

 

 

 

 

 

 

AUD

 

 

 

AIG Construction Index 

36.2

 

 

 

35.6 

 

 

 

 

AUD

 

 

 

NAB Business Confidence 

3

 

 

 

 

 

 

 

MYR

 

 

 

Malaysian Trade Balance 

10.58B

 

9.20B 

 

8.75B 

 

 

 

 

MYR

 

 

 

Malaysian Industrial Production (YoY) 

7.5%

 

6.5% 

 

0.3% 

   

 

 

Economic Events for April, 11, 2012

02:30     AUD      Home Loans (MoM)                                      -3.5%                     -1.2%                                    

Home Loans record the change in the number of new loans granted for owner-occupied homes. It is a leading indicator of demand in the housing market.

13:30     USD      Import Price Index (MoM)                          0.8%                     0.4%     

The Import Price Index measures the change in the price of imported goods and services purchased domestically.

19:00     USD      Federal Budget Balance                                -201.5B                 -232.0B

The Federal Budget Balance measures the difference in value between the federal government’s income and expenditure during the reported month. A positive number indicates a budget surplus; a negative number indicates a deficit. 

Government Bond Auctions April 10-20, 2012

Apr 11  09:10  Italy   BOT auction

Apr 11  09:30  Germany  Eur 5.0bn new Jul 2022 Bund

Apr 11  09:10  Sweden  Sek 5.0bn Jul 2012 & Sek 5.0bn Sep 2012 T-bills

Apr 11  09:30  Swiss  Bond auction

Apr 11  09:30  UK  Gbp 4.5bn 1.0% Sep 2017 Conventional Gilt

Apr 11  10:00  Norway  Details T-bill auction on Apr 16

Apr 11  14:30  Sweden  Details nominal bond auction on Apr 18

Apr 11  17:00  US  Auctions 10Y Notes

Apr 12  09:10  Italy   BTP/CCTeu auction

Apr 12  09:30  UK  Gbp 2.0bn 4.25% Jun 2032 Conventional Gilt

Apr 12  15:00  US  Announces auction of 5Y TIPS on Apr 19

Apr 12  17:00  US  Auctions 30Y Bonds

Apr 13  10:00  Belgium  OLO mini bond auction

Apr 16-30 n/a  UK Re-opened 3.75% 2052 Conventional Gilt syndication

Apr 16  09:10  Slovakia  Auctions floating rate Nov 2016 & 4.35% Oct 2025 & Bonds

Apr 16  09:10  Norway  T-bill auction

Apr 17  08:30  Spain  12 & 18M T-bill auction

Apr 17  09:30  Belgium  Auctions 3 & 12M T-bills

Apr 18  09:10  Sweden  Nominal bond auction

Apr 18  09:30  Germany  Eur 5.0bn 0.25% Mar 2014 Schatz

Apr 18  14:30  Sweden  Details T-bill auction on Apr 25

Apr 19  08:30  Spain  Obligacion auction

Apr 19  08:50  France  BTAN auction

Apr 19  09:30  UK  Auctions 0.125% I/L Gilt 2029

Apr 19  09:50  France  OATi auction

Apr 19  15:00  US Announces 2Y Notes on Apr 24, 5Y Notes on Apr 25 & 7Y Notes on Apr 26

Apr 19  17:00  US  Auctions 5Y TIPS 

Apr 20  15:30  Italy   Details CTZ/BTPei on Apr 24 & BOT on Apr 26

USD/CNY Fundamental Analysis April 10, 2012 Forecast

Analysis and Recommendation: (close of Asian session)

USD/CNY is exchanging at 6.3070 as the USD picked up some of the losses from the release of the NFP.

The dollar fell against major global currencies on Friday after the U.S. government reported that the economy added a net 120,000 nonfarm payrolls in March, far below market expectations that renewed talk of Federal Reserve easing measures.

China’s inflation edged up in March as the government shifted focus from containing politically dangerous price rises to stimulating its slowing economy.

The government said on Monday that consumer prices rose 3.6 per cent over a year earlier, up from February’s 3.2 per cent. That was driven by a 7.5 per cent rise in food costs, up from the previous month’s 6.2 per cent

Economic Data April 9, 2012 actual v. forecast ( most European markets are closed )

Apr. 09

 

JPY

 

 

 

Current Account 

0.85T

 

0.66T 

 

0.14T 

   

 

 

CNY

 

 

 

Chinese CPI (YoY) 

3.6%

 

3.3% 

 

3.2% 

 

 

 

 

CNY

 

 

 

Chinese PPI (YoY) 

-0.3%

 

-0.2% 

 

0.0% 

 

 

 

Economic Events April 10, 2012 that affect the AUD,NZD,JPY and CNY

02:30     AUD      NAB Business Confidence                                                                          1                             

The National Australia Bank (NAB) Business Confidence Index rates the current level of business conditions in Australia. Changes in business sentiment can be an early signal of future economic activity such as spending, hiring, and investment. The index is based on data collected from a survey of around 350 companies. A level above zero indicates improving conditions; below indicates worsening conditions.

 

04:30     JPY        Interest Rate Decision                                                                                 0.10%                   

Bank of Japan (BOJ) policy board members come to a consensus on where to set the rate. Traders watch interest rate changes closely as short term interest rates are the primary factor in currency valuation. 

 

06:45     CHF       Unemployment Rate                                                    3.1%                      3.1%                     

The Unemployment Rate measures the percentage of the total work force that is unemployed and actively seeking employment during the previous month.

 

23:00     NZD      NZIER Business Confidence      

The New Zealand Institute of Economic Research (NZIER) Business Confidence Index rates the relative six-month business outlook. The index is a leading indicator of economic health. The data is compiled from a survey of about 2500 businesses.  

 

Government Bond Auctions April 10-20, 2012

Apr 10  08:30  Holland  Eur 2.5-3.5bn reopened Jan 2017 DSL auction

Apr 10  09:15  Austria  Eur 1.32bn 3.2% Feb 2017 & 3.4% Nov 2022 RAGBs

Apr 10  14:30  UK  Details I/L Gilt auction on Apr 19

Apr 10  17:00  US  Auctions 3Y Notes

Apr 11  09:10  Italy   BOT auction

Apr 11  09:30  Germany  Eur 5.0bn new Jul 2022 Bund

Apr 11  09:10  Sweden  Sek 5.0bn Jul 2012 & Sek 5.0bn Sep 2012 T-bills

Apr 11  09:30  Swiss  Bond auction

Apr 11  09:30  UK  Gbp 4.5bn 1.0% Sep 2017 Conventional Gilt

Apr 11  10:00  Norway  Details T-bill auction on Apr 16

Apr 11  14:30  Sweden  Details nominal bond auction on Apr 18

Apr 11  17:00  US  Auctions 10Y Notes

Apr 12  09:10  Italy   BTP/CCTeu auction

Apr 12  09:30  UK  Gbp 2.0bn 4.25% Jun 2032 Conventional Gilt

Apr 12  15:00  US  Announces auction of 5Y TIPS on Apr 19

Apr 12  17:00  US  Auctions 30Y Bonds

Apr 13  10:00  Belgium  OLO mini bond auction

Apr 16-30 n/a  UK Re-opened 3.75% 2052 Conventional Gilt syndication

Apr 16  09:10  Slovakia  Auctions floating rate Nov 2016 & 4.35% Oct 2025 & Bonds

Apr 16  09:10  Norway  T-bill auction

Apr 17  08:30  Spain  12 & 18M T-bill auction

Apr 17  09:30  Belgium  Auctions 3 & 12M T-bills

Apr 18  09:10  Sweden  Nominal bond auction

Apr 18  09:30  Germany  Eur 5.0bn 0.25% Mar 2014 Schatz

Apr 18  14:30  Sweden  Details T-bill auction on Apr 25

Apr 19  08:30  Spain  Obligacion auction

Apr 19  08:50  France  BTAN auction

Apr 19  09:30  UK  Auctions 0.125% I/L Gilt 2029

Apr 19  09:50  France  OATi auction

Apr 19  15:00  US Announces 2Y Notes on Apr 24, 5Y Notes on Apr 25 & 7Y Notes on Apr 26

Apr 19  17:00  US  Auctions 5Y TIPS 

Apr 20  15:30  Italy   Details CTZ/BTPei on Apr 24 & BOT on Apr 26

USD/CNY Monthly Fundamental Forecast April 2012

Outlook and Recommendation

FxEmpire is pleased to announce the addition of the USD/CNY to our range of currency. We will begin providing daily, weekly and monthly forecast and analsyis.

At the beginning of April the Chinese yuan appreciated, pushing the currency to a new record high (or for USDCNY a new low). Forwards continue to price in no further appreciation this year, which we think is too timid in an environment of a soft economic landing and international pressure. However, there is an increasingly strong case for USDCNY having moved materially closer to fair value, particularly as the current account balance has shifted materially lower. We hold a year-end forecast of 6.10.     

The Chinese economy will expand at a strong 8.6% y/y rate during 2012, after last year’s 9.2% gain. Growth will likely accelerate to 8.9% in 2013. Ample room for policy maneuvering remains, with supportive fiscal actions —income tax cuts and extensions to infrastructure and social housing development— to be accompanied by a switch to monetary easing. International trade transactions slowed through the turn of the year. In a context of elevated commodity costs, and with local demand gains outpacing global growth, China’s current account surplus, estimated to close the year at 2.7% of GDP (down from 5.2% three years ago), will continue to narrow over the medium term. The renminbi (CNY) will appreciate at a moderate pace over the next two years. The CNY gained 4.7% against the US dollar in 2011, and is expected to strengthen at a 3.7% yearly rate over 2012-13, as gradual appreciation remains a primary component of a concerted policy to promote domestic market development. Inflation has stabilized, but will display an upward trend throughout the year. Despite having lowered the bank required reserve ratio on two occasions over the past six months, the People’s Bank of China (PBoC) has yet to witch to a definitive growth-promoting stance. The official public sector balance will continue to improve as revenue growth outpaces spending. Tight credit and property restrictions are resulting in healthy house price corrections.

People’s Bank of China increased interest rates for the third time this year on July 6, making clear that taming inflation is a top priority even when as the economy slows. 

 Benchmark one-year lending rates will be raised 25 basis points to 6.56 percent, and benchmark one-year deposit rates will be raised 25 basis points to 3.5 percent.

Abundant liquidity and elevated commodity prices drove China’s inflation to a 34-month high of 5.5 percent in May, unsettling Beijing which worries rising prices may stir social unrest.