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MONDAY 22ND FEBRUARY2010
Ranges NZD/USD: 6929/7077 AUD/USD: 8878/9035 NZD/AUD: 7761/ 7872 Last week The big surprise last week came late in the week when the US Fed raised the discount rate by 25 basis points. This signalled that the US economy is moving slowly along the exit of their current expansive monetary policy. The move obviously kicked the Euro in the teeth and highlights the contrast between whats happening in the US, and to some of the European countries. We have seen the bottom in the US economy, but that can’t be said for some including our own. Unlike Aussie where it continues to outperform and this is the reason the NZD continues to weaken against the AUD. No matter what the PM says, all things are not equal between us and those lucky sods across the ditch, just wait for the cricket to start, NZD/AUD will be at 70 cents by the end of the tour. What we did Short NZD agst USD and AUD Bought small Dol/Yen Sold Euro This week Not alot of data out down here this week, but a fair bit will be released from Europe, so the nights look like they will be busy. Right here in the markets, it looks like we are seeing a short squeeze in NZD, AUD and Euro as the market appears once again, to be over positioned. However, we don’t expect this to last, with continuing problems in Europe and with the US looking good , the trend should over weigh any short term fluctuation. A chance to get long Dollars it would seem. What we will do Buy USD/JPY on dips Sell Euro, NZD and AUD on rallies Sell NZD/AUD and stay short looking for a break lower again
THE WEEK AHEAD
Monday 22-Feb AU Motor Vehicle Sales – mom – Jan
Tuesday 23-Feb US Chicago Fed National Activity Index – Jan Dallas Fed Mfg Index – Feb Fed’s Yellen speaks on Economy in San Diego JN BOJ Minutes – Jan meeting AU RBA Deputy Governor Battellino speaks in Sydney GE IFO – Current Assessment – Feb IFO – Expectations – Feb
Wednesday 24-Feb US S&P/CaseShiller 20 City House Prices – mom - Dec Richmond Fed Mfg Index Consumer Confidence JN Merchandise Trade Balance – Adjusted – Jan AU Wage Cost Index – qoq – Q4 NZ RBNZ Inflation Expectations – Q1 GE GDP (F) – qoq – Q4 GFK Consumer Confidence – Feb EC Industrial New Orders – mom – Dec
Thursday 25-Feb US New Home Sales – mom – Jan Geithner testifies to House Budget Committee Fed’s Bernanke gives Monetary Policy Report AU Private Capital Expenditure – Q4 Construction Work Done – Q4 NZ NBNZ Business Confidence – Feb M3 Money Supply – yoy – Jan GE Unemployment Rate – Feb EC Eurozone M3 – yoy – Jan
Friday 26-Feb US Durable Goofs Orders – mom – Jan Initial Jobless Claims – week ending 21 Feb Continuing Claims – week ending 14 Feb Fed’s Bernanke Monetary Policy Report to Senate Panel Nz Building Permits – mom – Jan Trade Balance – 12mth total – Jan JN CPI – yoy – Jan Industrial Production – mom - Jan Retail Trade s.adj.– mom – Jan Housing Starts – yoy - Jan UK GFK Consumer Confidence – Feb AU Private Sector Credit – mom – Jan UK GDP (P) – qoq – Q4 EC Eurozone CPI – mom – Jan
27-Feb US GDP(P) – qoq Annualised – Q4 Chicago PMI - Feb University of Michigan Consumer Confidence – Feb (F) Existing Home Sales – mom – Jan NAPM Milwaukee – Feb GE CPI – mom – Feb
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