Forex Analysis
Re-balancing in China and the US: Who is exposed?
• The US needs to rebalance its economy from consumption to investment. China needs the opposite.
USD Mid-day Analysis
The Dollar continues to grind its way higher this morning, although further gains are likely to be held in check until US economic data is heard from later in the day.
JPY Mid-day Analysis
The September Yen produced a gap-lower opening last night that has turned into a sizable downside breakout, with prices posting heavy losses coming into this morning’s trading.
CHF Mid-day Analysis
The September Swiss continues to slide lower this morning, and has now reached a new 1-week low early in today’s trading.
EUR Mid-day Analysis
The September Euro has been able to bounce back from moderate pressure this morning, but may need to see stronger global risk sentiment in order to
Risk appetite still not a major FX driver
Correlations between general risk appetite/equities and currencies have been unusually low for quite some time.
The Global Macro Pulse
JPY weakness has raised the Nikkei 1.7%, S&P futures are up 0.1%, the HSI has risen 0.6%, and the Kospi has rallied 1.0%. Shanghai is essentially flat.
FX Daily
Market movers today • Today’s most interesting release is US retail sales for July. We expect to see an increase in the core measure of retail sales
Weekly Forex & Interest Rate Outlook
NZD/USD remains in consolidation mode, the most likely catalyst for a break outside the 0.7685-0.8135 range being the Fed’s decision on tapering.
USDJPY – small double bottom implies break of 97 then 97.65
Thursday’s bullish reversal has not been confirmed but today a close through 97.00 would suggest that a low is in place.
The Global Macro Pulse
The Nikkei has clawed back early losses to be down only 0.3% at the time of writing, thanks to a bounce in USDJPY.
Domestic Demand Arising
Domestic demand is picking up and we expect it to accelerate ahead. More investment is a cornerstone, as capital expansion broadens beyond the Christchurch rebuild.