Weekly Sentiment Paper

Distributed by: One Financial

For the Week of: 11/09 through 11/15

Written by: Andrei Wogen

Email: finance.wogen@gmail.com

Week in Review!

Australian Dollar!

New Zealand Dollar!

Japanese Yen!

China Renminbi; Onshore, Yuan!

Euro Area: Euro!

British Pound!

11

Canadian Dollar!

12

United States Dollar!

14

Order Levels!

16

Week in Review
US NFP numbers come in lower than expected while previous numbers from August and
September were revised higher; unemployment rate fell while wage growth remains weak
Canadian employment data comes in better than expected with the number of newly
employed rising much more than expected
ECB stays course and leaves rates and policy unchanged; Draghi dovish on the economy
while also dogging questions and dampening concerns raised about his management style
within the ECB after an article on Reuters was released regarding this last week
Australian employment data was good overall though with recent adjustments in the data
and the calculations of the data, the markets trust in this data has been weakened
New Zealand employment data comes in better than expected with the unemployment
rate falling
RBA leaves interest rates steady while their statement stays virtually the same; their
concerns about the high Australian Dollar continue and seems to be getting more intense
Russia central bank freely floats the Rouble signaling the struggles the bank has had in
defending its currency from depreciation in the light of bets against it as oil prices
continue to fall causing weak growth in Russia
BoJ monetary policy meeting minutes from their meeting on October 6th shows no
indication that the additional easing measures implemented by the Bank at their next
meeting on October 31st was coming
Reports that fighting in Ukraines Donetsk region is escalating again as a high school is hit
killing two students and there were reports of Russian tanks crossing into Ukraine

Australian Dollar
Overall Picture and Its Tone
Overall Australia is weak economically. The weak points continue to be weak mining
sector and the employment sector while the consumer also remains weak and feels weak as
both retail sales and consumer sentiment have been weak respectively. As for the business

sector, manufacturing and services sectors continue to weaken as does business sentiment.
Politically speaking, the country is doing well but recent budget problems have caused the
government to cut down on spending and adjust policy in order to keep debt from rising too
much. This action has also caused consumer sentiment to weaken. Another thing that has
caused some worry from the government is the strong housing market. Prices continue to rise
which is helping to support consumers some but has caused the government to voice their
disproval of these high prices worrying about a bubble forming. As for the central bank they
continue to remain neutral to slightly dovish while continuing to keep rates at historical levels.
They continue to say that rates are the right level to foster growth and investment. Overall then
the tone of Australia is neutral to slightly negative
. Overall Sentiment of the Australian Dollar

As for the overall sentiment towards the Australian Dollar, this remains neutral
to negative as the currency has moved high by quite a bit versus the Yen but has now
fallen versus the US Dollar after being in a range. Main drivers of this negative
sentiment continue to be weakness in Australia and the US being strong economically.
Last Week in Review
Last week, the Australian Dollar began to show more weakness as the release of better
than expected employment data was largely ignored by the market. This is understandable
though given the readjustments seen recently in the data which has shown different calculations
for the data being released versus what was released in the past. On the policy side of things,
the central bank met for its monthly meeting but left rates unchanged and to a large extent, left
their policy statement unchanged as well though with greater emphasis on their worry about
the high value of the Australian Dollar. However, on a note regarding that worry, the Australian
Dollar relative to the USD is pretty much at the level now the central bank has wanted it to be so
why they think it is still too high is of interest to me. Tells me that the currency is indeed too
high and that its value is still not helping to support the Australian economy, especially in their
exports. We could therefore see some more jawboning and/or actual policy changes to help
bring down the Australian Dollar even further than where it is now. Overall though, at the end
of last week, the relationship between the overall conditions of Australia and the overall
sentiment of the Australian Dollar began to move more inline with each other.

The Week Ahead and Other Thoughts

This week is not so busy though with some data to watch nonetheless. Home Loans and
Investment Lending for Homes are both being released on Sunday night (EST US time) and due
to the concerns continuing to increase from the government on the strength of the housing
market, especially in terms of the investor activity in the housing sector, these data releases will
garner interest from them. On Monday Consumer and Business Confidence numbers and
House Price numbers will be released and then on Tuesday Wage Price numbers will be

released and then closing out the week in terms of data from Australia, on Thursday Consumer
Inflation expectations will be released. Both inflation expectations and wages have been moving
lower in the past several months and so any sign of recovery in these will be an encouraging
sign for the RBA and for the Australian economy as a whole.

New Zealand Dollar

Overall Picture and Its Tone
New Zealand as a whole continues to do well though has weakened some over the past
few months, economically speaking. Lower commodity prices, lower house prices and lower
inflation have been the main weaknesses for the New Zealand economy. Other weaknesses have
been a deteriorating trade balance, along with falling exports, a fall in business and consumer
sentiment which has also translated into lower consumer spending via retail sales data.
However all is not bad in New Zealand and actually things are pretty good despite these
negatives. Though business sentiment is low, it is still high in historical terms which has been
seen in the manufacturing sector in particular which remains strong as well as the industrial
sector. As for trade, imports continue to rise while the labor market also remains strong with
falling unemployment and increased employment overall. However, as is the case around the
world overall, wages continue to remain weak. Looking to the housing market now, after rising
prices from the beginning of this year, they have fallen now from their highs after
implementation of policy to help cool the housing market went into effect several months back.
This, and now weaker building permits, continue to cause the housing market to weaken
overall though in some parts, construction remains active overall. As for the government, they
continue to remain strong as pro-growth policies and increased government spending continue
to help support the economy and with the recent elections keeping the incumbent prime
minister in power for another term, there will likely be little change. In regards to the central
bank, after having tightened policy by raising rates three times this year beginning in March,
the central bank is now on hold indefinitely after falling commodity prices and lower inflation
have caused the Bank to reassess their estimates of future inflation in the country. This is a
pretty big turnaround for them from just a few months ago when they were talking about
seeing a need to raise rates pretty consistently due to what they used to see as inflation
pressures building. However these pressures have since diminished or left altogether and so in
response the central bank is expected to be on hold until at least the middle of next year and

possibly longer if inflation doesnt start to pick up soon. They have also voiced their concenrs
about the high valuation of the New Zealand Dollar relative to other currencies. This has caused
the RBNZ to intervene in recent months, in the currency market to bring down the value fo the
Kiwi. This is an obvious statement by the Bank that they are not willing to let the currency stay
too strong and will do something to help bring it down and so in light of this there continues to
be speculation that they will continue to intervene in the markets going forward. Overall then,
the tone for New Zealand remains in neutral territory overall.

Overall Sentiment of the New Zealand Dollar

The overall sentiment for the New Zealand dollar is negative to neutral. Recent
developments in other countries, namely Japan and the US, have pushed the currency
both up and down. Overall though sentiment for the New Zealand Dollar remains on
the fragile side as expectations for another rate hike by the RBNZ while expectations of
more intervention by the RBNZ to bring the New Zealand Dollar down continue and
lower commodity (dairy) prices continue to cause inflation to move lower and the
economy to weaken some.
Last Week in Review
Last week, the employment picture showed improvement as the unemployment rate fell,
the participation rate improved and the number of newly employed individuals rose for the
third quarter. Also, labor cost data improved a bit, albeit just in the year-over-year data but still
an encouraging sign nonetheless. However, this really does little to (and did little) to change
things in terms of how the New Zealand economy is doing and with the central bank clearly on
hold for a while in terms of tightening policy, the market is clearly focused on other things right
now. Also too, with the USD so strong right now, the NZ Dollar continues its tumble along with
other commodity currencies. Overall then the relationship between the New Zealand economy
and the New Zealand Dollar continues as the latter continues to move lower and the former
continues to be good but not great and is showing some weakness right now.

The Week Ahead and Other Thoughts

For this week, there is little in the way of data of much importance. On Monday electronic
card retail sales data will be released, then on Tuesday House price data will be released and
then on Wednesday we will see Business NZ PMI data which will give indications on how the
business sector performed for the month of October. Other than that, not much else to watch for
the New Zealand dollar except for developments elsewhere and chart levels to gauge its
strength or weakness.

Japanese Yen
Overall Picture and Its Tone
Japan as a whole is very weak right now, politically, socially and economically. On the
economic side, businesses continue to be weak as manufacturing, services and industrial sectors
continue to be weak. On the consumer side, consumer sentiment and consumption both remain
weak as seen recently in household spending and retail sales data. As for trade, imports and
exports have been weak but now is improving some in recent months while the overall trade
balance remains in negative territory. Inflation also remains weak and continues to fall causing
deflation to persist. On the government side of things, debt remains high while recent tax hikes
meant to bring down the level of debt in the country have caused yet more weakness in the
economy. The government in general remains stuck in old ways and lacking reforms to help
revise the economy. As for the central bank they continue to remain very negative overall with
low interest rates and and a quantitative easing program that puts all others that have occurred
or are occurring to shame as its size is huge. A couple of weeks ago too, the central bank
surprised the markets by implementing and increasing their QE program. Finally, on the social
side of things, as the population continues to age the levels of debt continue to increase while
other social developments continue to cause weakness in the economy. Overall then the picture
of Japan is very negative right now.

Overall Sentiment of the Japanese Yen

The overall sentiment for the Japanese Yen is very negative right now as recent
increased easing and continue weak economic activity continue to push the Yen lower
versus other better performing regions currencies.
Last Week in Review
Last week, the Yen continued its decline while data came in mixed. Services data and
vehicle sales came in lower as did Labor Cash Earnings. Manufacturing data, Leading economic
index and Coincident index numbers all came in better than previous. However overall the
relationship between the overall sentiment of the Yen and the overall tone of Japan continues to
move in line with each other.

The Week Ahead and Other Thoughts

This week there is not a lot of data to watch for overall. On Monday Trade balance data
and Consumer confidence numbers will be released, on Tuesday Machine orders data will be
released and then on Wednesday we will get Machinery Orders and Industrial Production

numbers. Overall the data this week will continue to give us more indications of how well, or
not, the Japanese economy is doing. A note on this upcoming data too, especially Industrial
production. This data did improve some last month and so it will be interesting to see whether
this improvement continues. Same with trade balance data as exports and imports have
improved some over the past couple of months or so but remain weak overall. So any more
indication of improvement in these things will be a welcome sign indeed.

China Renminbi; Onshore, Yuan

Overall Picture and Tone
Overall China is weak right now economically and is changing politically and socially. As
for the economic picture, this has been weakening over the past few months. Inflation continues
to move lower which also includes food prices which continue to move lower. As for the
consumer, Consumer Confidence is improving some again after deteriorating over the past few
months while retail sales continue to move lower. As for the business side of things, the services
sector, manufacturing sector and industrial sector as well as business confidence all continue to
weaken overall. As for the employment picture this remains mixed to weak as labor costs
continue to weaken and the number of unemployed persons continues to move higher
highlighting the struggle of the Chinese economy to move from a strictly manufacturing based
economy to more of a services based country in terms of their main revenue and GDP growth
source. As for the housing market, prices continue to move lower as does loan growth putting
pressure on the consumer and the economy as a whole. With lower housing prices the demand
for existing and new housing is slowing and with the real estate market being such a big driver
of growth in China, this is putting a strain on its overall growth. On the government side of
things they continue to work on pushing through reforms to move the economy form a
centrally, government controlled economy, to a more market baed economy. During their recent
Fourth Plenum meeting they highlighted these reforms they are and want to implement
especially focusing on making the law system freer. As for the central bank, they continue to
implement reforms and easing measures to help revive the economy including reserve ratio for
certain banks and other reforms to help rural regions and the real estate market improve.
Interest rate liberalization is also one of the main things on the central banks agenda in terms of
reforms they want to implement. Overall then the tone of China is a more negative one right
now as reforms being implemented by the government and central bank continue to cause

weakness in the economy while overall global growth being weak is causing the manufacturing
industry to be weak right now.

Overall Sentiment of the Chinese Yuan (Onshore)

The overall sentiment for China is negative but as the Yuan is controlled by the
PBoC right now, the movements in their are not true in many ways. However, the Yuan
has been strengthening versus the USD against the overall tone of China that is
currently present.
Last Week in Review
Last week, data continued to show weakness in the economy. Non-Manufacturing and
Services PMI data both came in weaker than previous readings while HSBC Manufacturing PMI
data came in a bit above previous estimates. Overall then the economy remains weak while the
relationship between the overall sentiment of the Yuan and the overall tone of China continue to
diverge.
The Week Ahead and Other Thoughts:
This week inflation data is due to be released on Sunday night (US EST time) and will be
of great focus for the markets. Expectations are that the rate will continue to move lower and if
this occurs expectations will increase that the PBoC will ease policy further somehow. The other
data of importance on Sunday night will be new loan data. This suddenly weakened a few
months back and has not really rebounded very much since then and so it will be of interest to
the markets on whether new loans continue to improve. However with the governments recent
crackdown on the loan industry, particularly the shadow banking industry, the amount of new
loans will likely continue to move lower and stay weak. This in turn I expect will put more
pressure on the housing market which will put yet more pressure on overall growth in China.
Other data of importance will be Industrial production and Retail sales data on Wednesday as
well as Urban Investment numbers and then Foreign Investment numbers being released on
Thursday. So some key data this week to gauge the consumer and overall investment in China
as well as conditions of the business sector.

Euro Area: Euro

Overall Picture and Its Tone
The overall conditions of the Euro Zone are and continue to be very weak and negative.
Overall growth continues to move lower with some countries, including Germany, slipping into
negative growth in the most recent quarter. As for the business side of the economy, the services
and manufacturing and industries sectors all continue to move into weak territory while
business sentiment also continues to deteriorate. As for the consumer, consumption remains low
as seen in continued weakening retail sales data while sentiment also continues to move lower.
The labor market is also very weak with high unemployment, especially youth unemployment,
and wages continue to be low. Trade also remains weak with imports falling while exports are
actually remaining fairly supported. As far as the loan and money sector goes, loan growth
continues to be weak to both businesses and consumers. On the government side of things debt
levels remain very high and there is little ambition from some Euro Zone members to bring
those high debt levels down. In fact the recent budget presented by Italy to the European
Commission showed little in the way of actual reforms to bring down their debt level and was
accepted by the Commission showing once again, that these debt levels in the Euro Zone will
continue to rise until a day of reckoning comes and these countries have to default. Another
thing of continued concern continues to be the political divide between political members and
regions of the Euro Zone especially, now, in terms of how the ECB is allowed to deal with the
low growth and inflation. However disagreement and divide are also continuing to be present
in light of continued rising debt and lack of reforms from different countries, namely Italy and
France. As for the central bank, they continue to remain very dovish, recently implementing a
sort of QE program with the purchases of covered bonds and ABS assets in a bid to help revive
the Euro Zones struggling loan and banking industry in order to therefore revive economic
growth. They also have cut rates quite a good amount since about June of this year with one of
their rates now in negative territory. So overall the tone of the Euro Zone is negative.

Overall Sentiment of the Euro

The overall sentiment for the Euro currency is negative as well as it continues to

move lower versus the USD though versus the Yen the Euro sentiment is quite positive,
rising quite a bit over the past few weeks.
Last Week in Review
The ECB meeting last week showed little in the way of changes to both rhetoric or
changes in policy. Focus instead was on reports of discord within the ECB. Reports came out of
the management style of Mario Draghi within the ECB which included reports of him holding
back the circulation of key reports for fear of being shot down by some members of the ECB
(namely the German members) as well as reports of him texting and giving little attention to
board members during policy meetings. When confronted with these allegations during the
ECBs press conference he didnt deny but he also didnt admit to those claims. He simply
explained it away saying that disagreements happen all the time and that things are good now;
in essence. However this discord is a concern to me and other market participants. It would
seem that the discord and disagreements seen in the political space of the Euro Zone are
beginning to seep through to the ECB or, what is the most likely scenario, have been there for a
while and we are now all just starting to see it. The problem with this discord, especially within
the ECB, is that if things too bad we could see some sort of change in policy or worse off, in
those that run the bank; namely Draghi himself. This to me is a worse case scenario, Draghi
resigning or being kicked out of the ECB, but these reports just show the level of disagreement
and difficulty it has been and is becoming even more to run a central bank that is responsible for
the economic, and in many ways the political, future of several countries at once. My prediction
always has been and continues to be, that the Euro Zone will break apart at some point. Could
this be the start of it? Only time will tell. Other data this week continued to show the economy
going weaker. Manufacturing data from Germany, Italy and Euro Zone all came in lower than
expected while the Euro Zone and German data came in above previous estimates. France,
Spains and Greece data came in better than expected. Services data also came in mixed with
Spain and Italy coming in better than previous while Germany and the Euro Zone and France
came in lower than previous. Other data showed France Industrial output and imports and
exports data all improving for the month of September while German data of the same time
slipped again lower than expected for the same period but did come in better than previous.
German Factory orders were also lower than expected. Overall though the tone of the Euro
Zone continues to be negative.

The Week Ahead and Other Thoughts

For this week preliminary third quarter GDP and October CPI numbers for the Euro Zone
will be of focus. These are being released on Friday along with German third quarter
preliminary GDP data, which will also be in focus as will France Third quarter GDP numbers.
Germany in particular will be one to watch as last quarter showed a negative number and so if
this quarters number is in negative territory it will mean that Germany is in recession, officially.
If this happens this will be of great concern by the markets and the ECB as well. Other data of

note will be German, Spain and France and Italy CPI data on Thursday, which will be the
precursor for Euro Zone CPI the next day. Also of note will be Industrial Production numbers
on Wednesday for the Euro Zone. Another thing to keep an eye on is the Catalonia vote which is
occurred on Sunday. This vote is being done to give the Catalonia region a voice and leverage in
the way they are governed and in how Spain approaches governing the region. But how the
Spanish government responds to this vote has yet to be seen but according to many experts
this vote is illegal and so it can be assumed that the Spanish government sees it the same way.
This vote will more than likely be paid attention to by the markets and especially in how Spain
responds given the political and social divide in the Euro Zone, this vote is just another sign of
this and could pull the Euro Zone apart even more.

British Pound
Overall Picture and Its Tone
The overall economic picture is one of strong growth while some weakness has been seen
recently in some sectors. The recent weakness has been seen in particular in the manufacturing
and services industries with the latter being of some concern as the UKs economy is so
dependent on this sector for its growth. Other weakness has been seen in the countrys exports,
though not too surprising there as the Pound continues to be strong overall. Imports also have
fallen some over the last few months. As for the consumer, consumption has moved lower as
seen in recent weakening in Retail Sales data while sentiment numbers have begun to weaken.
This weakness in consumer sentiment has stemmed in part from a weakening housing market
as house prices fall as well as construction activity. As far as inflation goes, this also continues to
move lower as the UK follows the rest of the world (or a large part of it) into a world-wide
deflationary trend, in some respects. This low inflation and weaker growth has also kept the
BoE at bay in terms of them raising rates. They continue to be neutral on that fact and the
market is currently expecting them to keep rates on hold and not raise them until the middle
part of next year at the very least. Another concern of the BoE, which has kept them from
raising rates at this point is the low wage growth. However the labor market as a whole
continues to improve as the number of newly employed continues to rise and the number of
unemployed continues to fall. Overall then the tone of the United Kingdom is neutral to slightly
positive.

Overall Sentiment of Pound Sterling

Overall the sentiment is neutral to negative as it continues to move lower versus the USD
and more positive versus the Yen as it moves higher.

Last Week in Review

Last week was a bit quieter in terms of data but still more signs that the UK economy is
slowing some more. Services PMI data came in lower than expected and previous as did
Construction PMI data. House price data also came in lower than previous and expected.
Positive data was manufacturing PMI, industrial production and manufacturing production
data. This is some encouraging signs in this data as it could mean that the export sector could
also be gaining some strength. The other event of note was the BoE meeting but no changes
occurred to rates or their QE program. So a non-event overall. The other piece of data was Trade
Balance data which came in lower than expected but saw a rise in both export and import prices
and volumes. Two encouraging signs.

The Week Ahead and Other Thoughts

For this week the BoE quarterly inflation report will be the key focus of the markets. This
report will be interesting to hear of especially in respect to the BoEs growth and inflation
assessments and forecasts after recent weakness has been seen in both. Other data for the week,
happening on Wednesday as will the Inflation Report hearings, will be employment and wage
data. The former has been improving well overall though the wage growth is still weak and so
the BoE and the markets are watching for this to improve more. If it does rate hikes will likely
come closer than than they are now. Other than these events/data, it will be a quiet week for the
Pound in terms of data.

Canadian Dollar
Overall Picture and Its Tone
The Canadian economy continues to be mixed overall. The positive side of things is that
inflation continues to be relatively stable and high, though this has likely changed now with oil
moving so low. Overall growth too continues to be supported. As for the consumer this is where
some of the weakness lies as spending remains subdued as seen via retail sales data. As for the
business side of things, this remains supported overall. Oil production also continues to
increase but with prices as low as they are, they are not helping the economy any right now. As

for the housing sector, this remains strong with high prices and good building activity both
being supported by low interest rates. As for trade, exports have started to increase some
recently especially as the US continues to bounce back. As for the labor market, this seems to be
improving as new jobs continue to increase in number and the unemployment rate continues to
move higher while wages remain weak, as seems to be norm right now. As for the central bank
they remain neutral to dovish in their tone towards the Canadian economy though they are
starting to sound a bit more optimistic now as the US economy, which Canada is very
dependent on, continues to improve. However, they continue to see recent inflation levels as
being just temporary and still continue to expect weaker growth for a while going forward.
Overall then the tone of Canada as a whole is neutral in relation to the monetary policy in
particular.

Overall Sentiment of the Canadian Dollar

Overall the sentiment is negative as it continues to move lower versus the USD while it is
positive versus the Yen as it moves higher. However overall sentiment is negative the CAD as
oil prices move lower.

Last Week in Review

Last week, employment data showed a continued improvement in the employment sector
of Canada which is an encouraging sign. The unemployment rate fell while the number of
newly employed individuals rose much more than expected. The participation rate stayed
steady. Other data though showed some weakness including Ivey purchasing managers index
which saw huge drop in business conditions for Canada. As for the internals, employment,
prices and inventories all fell while deliveries rose. Overall though it was a pretty dismal
number and shows that things are not all roses in Canada right now, economically speaking
anyway. Trade data showed an improvement in the Trade Balance data though imports were
lower than previous while exports rose. Another good number for Canada last week was
manufacturing data which came in better than previous estimates. Overall though the big story
for Canada remains oil prices which continue to go lower. Overall then the relationship between
the Canadian Dollar and the underlying sentiment of the region continued to move inline with
each other overall when looking at USD/CAD while things continue to diverge in the CAD/
JPY pair helped along by Yen weakness.
The Week Ahead and Other Thoughts
Oil will be the big story this week as there is little data for the week from Canada.
Housing starts will be released on Monday and then house price data on Thursday along with
the BoC review of the economy. This latter release could get more attention than usual given the
fact that the BoC removed the Neutral phrase from its policy statement at its most recent
meeting leaving the markets to use things such as this review to assess what the Bank is
thinking in terms of rates and the economy.

United States Dollar

Overall Picture and Its Tone
The overall picture of the US one of positive growth overall, a central bank that is (very
slowly) turning more hawkish while the government has been pushed to one side in many
respects as it continues to wrangle with its differences and division. As for the economy: it
continues to improve overall though there has been some weakness seen recently, particularly
in the manufacturing sector due to the increasing value of the US Dollar. However this sector, as
well as the industrial and services sectors continue to grow. Business sentiment also remains
strong. The employment sector continues to be good overall with rising employment and falling
unemployment. However problems remain as long term unemployed people continue to
struggle to find jobs and the skills gap continues to widen as fewer and fewer have the skills
necessary to do high tech jobs that are so vital to a nations growth. As for the consumer, they
also remain pretty good though weak wage growth continues to be a problem and consumption
is down some now looking at retail sales data. Sentiment though for the consumer remains
strong overall. Trade continues to do well with both exports and imports strong though the
deficit in the US continues to deepen. As for inflation, this continues to stay steady, but steadily
below the Feds target. As for housing, after a good start this year this sector has weakened
some in the past few months as rate hike expectations continue to be in focus for this industry.
As for rates, and the Fed, in light of the overall US economic picture they have begun to turn
more hawkish in their tone and in their policy recently exiting their QE program completely in a
bid to begin to slowly tighten policy. The tone from the Fed is also changing, though also
changing as they are sounding more optimistic on the economy and jobs and so on but are still
concerned about low inflation. Looking to the government, this part of the US continues to be in
a wrangle with itself failing to pass any meaningful laws or policy changes to help the economy
grow. Recent mid-term elections have given some people some hope as the Republicans now
control both the House and Senate though with a stubborn President at the helm of things, little
will likely change until after presidential elections in two years. However we will have to see.
Maybe Congress will be able to pull a rabbit out of its hat after all. Overall though the tone of
the US economy is neutral to positive overall due to a more optimistic Federal Reserve.

Overall Sentiment of the Canadian Dollar

Overall the sentiment is quite positive as the USD moves up against pretty much
everything else right now.

Last Week in Review

October employment data came in lower than expected but September and Augusts
reports were revised higher keeping the overall trend in jobs growth strong. However wage
growth fell versus the previous month showing more signs of weakness in the economy. Other
data in the employment sector was ADP employment change which came in better than
expected while productivity also rose for the third quarter. Unit labor costs fell though for the
third quarter showing once again that low wages are part of the game right now. Other data
that showed good numbers was ISM Manufacturing which came in above consensus and
previous. ISM non-manufacturing PMI came in lower than expected and previous and the trade
balance came in lower than previous, showing a continued widening deficit. Factory orders
came in as expected and better than previous but still in negative territory. Besides that the
relationship between the overall sentiment of the USD and the overall sentiment of the US
continues to move inline with each other.

The Week Ahead and Other Thoughts

For this week, the main data will be retail sales data for the month of October.
Expectations are for a better number than last time which would show improvement in the
consumer. With sentiment continuing to improve too, I expect that spending will pick up as
there tends to be a lag between consumption and sentiment. People have to feel good before
they buy stuff. As for sentiment, UoM Sentiment numbers will be released next week which
have expectations of a better number than last time. Other than that, weekly jobless claims on
Thursday, Whole Sale inventories number and Small business optimism numbers will be
released during the week. Also business inventories will be released. Overall though the US
Dollar continues to move higher and has likely moved into an officially longer-term bull trend
that will likely continue for several years now. Especially as monetary policy between major
economies (the Euro Zone and Japan especially) continue to diverge between the USs.

Order Levels
Currency
AUD/USD

Bids
0.85300

Offers
8.87600
0.89200

EUR/JPY

141.700

144.30

EUR/USD

1.22500

1.26000

1.20400

1.29000

0.74500

0.78500

0.76500

0.80400

168.00

184.60

NZD/USD

GBP/JPY

171.00
GBP/USD

USD/JPY

USD/CAD

1.57600

1.65000

1.54000

1.62000

112.40

116.00

105.00

117.00

1.08000

1.14700

1.10600