Currency Updates:
AUD/USD Europe weighed on the pair early doors and the pair’s slide picked up the pace after the break of lows seen ahead of the Oz jobs report. A quick move down to 0.8235/40 support met buyers. The pair bounced towards 0.8290 into NY’s open. Early NY saw pressure applied as an AFR story noted RBA’s Stevens wants the pair near 0.7500 http://bit.ly/1sfRBtQ . A quick spike down to 0.8214 ensued but the pair bounced nicely after the market realized Stevens also gave some push back on calls for rate cuts. The pair neared 0.8280 but then remained heavy thereafter as US claims and retail sales data were upbeat. The pair slipped a bit and sat just below 0.8250 late in the day. There is no Oz data later so traders are likely to take cues from China’s Nov IP and retail sales data. If the reports are soft like CPI was earlier this week, AUD/USD should trade heavy. We might then see 0.8200 tested. Should that level break the door is then open to the May 2010 low at 0.8066.
EUR/USD An early European attempt to break Asia’s high failed & EUR/USD dipped to 1.2414 ahead of the TLTRO. The 129bln reported was near expectations & EUR/USD bounced near 1.2465 into NY’s open. Early NY saw bear charge as the USD was firm. The pair slid from the open & the fall picked up the pace after US retail sales & claims were upbeat. US bond yields bounced off recent lows and gave the USD a further boost. EUR/USD slid towards 1.2360/70 support where a series of hourly lows and the 200-HMA sit. Little bounce was seen off the support and the pair sat just above 1.2380 late in the day. There is little major econ data to drive the pair. China’s Nov IP and retail sales data might impact a bit as will US Dec TR/U. of Mich. report. Technically it appears bears are taking control again. The break above the TL off October’s high and the 21-DMA failed to sustain itself & a break below the 10-DMA is eyed. Daily RSI is biased down so a retest of the 2014 low can’t be ruled out. A 1.2360 break bolsters that view.
USD/JPY A 2% recovery in USD/JPY from today’s 117.45 low began with rumored PKO in Asia and extended to 119.55 in NorAm trading after US Retail Sales beat f/cs across-the-board. The robust spending data (70% of USD GDP derives from consumer spending) sent Tsy yields higher and flatter and drove equities, including N225 futures, to session highs by early afternoon in NY. USD/JPY, by then intraday O/B, ran into offers ahead of the daily Tenkan, the 200-HMA & 50% of the 121.86-117.45 slide, all by 119.65. Uncertainty about the US CR to fund the govt and lingering pre-y/e position squaring look to have trimmed gains late in the day. GBP/JPY also recovered well, but was unable to reach Wed’s high before slipping late in the day. A renewed, hard fall in oil prices took WTI below 60 and touched off another smaller round of EM-led derisking. AUD/JPY’s low came on the AFR story the Stevens was looking for 75. EUR/JPY’s marginal break below Wed’s low o/n was a bear trap, with prices squeezing back above 148, though also failing to retest Wed’s high or the Tenkan nearby. IP/CU from Japan tonight, but China’s data dump may be the bigger event risk. Huge 120 expiries Fri.
Looking Ahead – Economic Data (GMT)
• 21:45 NZ Manufacturing PMI* Nov 59.3-prev
• 02:00 NZ RBNZ Offshore Holdings* Nov 62.4%-prev
• 05:30 CN Urban investment (ytd)yy* Nov f/c 15.8%, 15.9%-prev
• 05:30 CN Industrial Output YY* Nov f/c 7.5%, 7.7%-prev
• 05:30 CN Retail Sales YY* Nov f/c 11.5%, 11.5%-prev
• 04:30 JP Industrial Output Rev* Oct 0.2%-prev
• 04:30 JP Capacity Util Idx Chg MM* Oct 3.6%-prev
Looking Ahead – Events, Other Releases (GMT)
• No Significant Events
