Tuesday 8 June 2010

Morning Report
Foreign Exchange Market News and views
Previous Range Today’s Open Expected Risk aversion lingered. US equities tried to rebound, but weakened late session,
Asia Overnight 8.00am NZD cross Range Today the S&P500 currently down 1.2%. Financials are 2.7% lower, news that Goldman
NZD 0.6610-0.6713 0.6582-0.6693 Ð0.6598 0.6550-0.6650
Sachs was subpoenaed after allegedly failing to provide documents in a timely
manner weighing. Earlier, the Eurostoxx 50 closed 0.9% lower, and most Asian
AUD 0.8097-0.8230 0.8124-0.8216 Ð0.8117 Ð0.8129 0.8060-0.8170 markets were 2-3% lower. The CRB commodities index is unchanged, as is oil,
JPY 90.97-92.10 91.13-92.08 Ð91.53 Ð60.390 91.00-92.10 but copper shed another 2.2% to a fresh post-October low on global growth
EUR 1.1876-1.1966 1.1906-1.1992 Ð1.1918 Ð0.5536 1.1880-1.2000
concerns. Gold surged 1.9% towards its record high. US 10yr treasuries are 2bp
lower. Markets noted a WSJ article by Fedwatcher Jon Hilsenrath opining the
GBP 1.4401-1.4484 1.4388-1.4563 Ï1.4464 Ð0.4562 1.4400-1.4510 Fed would delay rate hikes due to the contagion of the European debt crisis.
Among European 10yr government bonds, Germany made a fresh yield low of
NZ Domestic Market (Previous day’s closing rates) 2.54% (down 2bp), while Spain made a fresh 12 month high of 4.60% (up 7bp),
Cash Curve Govt Stock Swap Rates (Qtrly) reflecting continuing aversion to the peripherals.
Cash 2.50% Nov-11 3.78% 1 Year 3.70% The US dollar index was steady near its year high. EUR was initially supported
30 Days 2.78% 2 Years 4.32% by strong German factory data to 1.1980 but then slipped to 1.1920. USD/JPY
Apr-13 4.45% ranged between 91.50 and 92.10, the yen the clear outperformer since Friday
3 Years 4.70%
60 Days 2.94% night.
Apr-15 4.94% 4 Years 4.97%
90 Days 2.98%
5 Years 5.17% AUD initially staged a corrective bounce from 0.8125 to 0.8216 but has fallen
Dec-17 5.38%
180 Days 3.23% 7 Years 5.42% back over the past few hours to 0.8125.
1 Year 3.66% May-21 5.60% 10 Years 5.68%
NZD fell further to a fresh two week low of 0.6582. AUD/NZD bounced to
1.2380, currently at 1.2310.
World Bourses and Indices
German factory orders rose 2.8% in April, much stronger than expected –
AUD USD
the market was looking for a correction after a 5.1% surge in March. Growth
Cash 4.50% 0.00 Fed Funds 0.00-0.25%
was split equally across domestic and export orders, indicating that it’s not just
90 Day 4.85% +0.02 3 Mth Libor 0.54% 0.00 a weak euro story.
3 Year Bond 4.69% +0.06 10 Year Notes 3.15% -0.05
10 Year Bond 5.29% -0.13 30 Year Bonds 4.08% -0.05 Eurozone Sentix investor confidence rose from -6.4 to –4.1 in June. Better
than expected, but only reclaiming less than half of the record drop seen in May.
NZX 50 3030.1 +6.0 CRB 249.0 +0.1
S&P/ASX200 4325.9 -123.5 Gold 1240.5 +20.6
Nikkei 9520.8 -380.4 Copper Fut. 274.70 -7.25
Outlook
FT100 5069.1 -56.9 Oil (WTI) 71.53 +0.02 AUD/USD and NZD/USD outlook next 24 hours: Risk aversion should keep
S&P500 1051.6 -13.2 NZ TWI 65.25 -0.53 a lid on AUD and NZD. AUD has critical Fibonacci support at 0.8110, but may
breach that today. NZD has channel support around 0.6550-0.6600, and also
Upcoming Events looks vulnerable.
Date Country Release Last Forecast
8 Jun NZ Q1 Building Work Put in Place 0.7% –
Q1 Real Manufacturing Sales s.a. 3.1% –
US May NIFB Small Business Survey 90.6 91.0
Jun IBD/TIPP Economic Optimism 48.7 48.4
Fedspeak: Duke, Hoenig
Jpn Apr Current Account ¥bn sa 1773 1424
May Bank Lending %yr –1.8% –
Ger Apr Industrial Production 4.0% 2.0%
Apr Current Account €bn 18.0 12.2
UK May BRC Retail Sales Monitor %yr –2.3% –
Can May Housing Starts 1.3% –
9 Jun Aus Jun Consumer Sentiment 108.0 –
RBA Governor Stevens speaking
May Housing Finance –3.4% –2.5%
May NAB Business Survey 7.7 –
US Apr Wholesale Inventories 0.4% 0.5%
Fed Beige Book
Imre Speizer, Senior Market Strategist, NZ, Ph: (04) 470 8266
Fedspeak: Bernanke, Lacker With contributions from Westpac Economics

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