News and Media

WEEKLY MARKET RECAP, WEEK AHEAD, AND SCHEDULE
Mandus Invest SA. | 27, January, 2008 / Sunday

The euro appreciated vis-a-vis the U.S. dollar last week as the single currency tested offers around the $1.4780 level and was supported around the $1.4365 level. The pair gained about 85 pips last week. The Fed enacted a rate intermeeting rate cut, taking the fed funds and discount rates lower by 75bps and noted a tightening in credit conditions and softening in labour and housing conditions. Most traders anticipate another 50bps or 75bps of easing by the FOMC on 30 January.
ECB’s Quaden sees 2008 inflation elevated and receding in 2009. ECB’s Stark said warned central banks may fail at stimulating output and employment and said the correction will be “ongoing” but said Europe cannot decouple itself from the global slowdown. ECB’s Constancio sees a possible slowdown and ECB’s Weber sees more write-downs and said market expectations of a rate cut are “wishful thinking.” The markets are pricing in about a 20% change of a 25bps cut by the ECB by February. ECB boss Trichet noted there is a “very significant” market correction and cited downside economic risks. Spain’s Solbes said there’s internal debate at the ECB on a rate cut while ECB’s Bini-Smaghi said a majority of ECB members will be impacted more than others.

Data released in the U.S. last week saw the Richmond Fed January manufacturing activity index fall to -8; weekly initial jobless claims were off 1,000 to 301,000; continuing jobless claims fell 75,000 to 2.672 million; and December existing home sales fell 2.2% m/m and 22.0% y/y.

Data released in the eurozone last week saw German December PPI fall 0.1% m/m; EMU-15 PMI manufacturing was steady at 52.6 while PMI services fell to 52.0; EMU-13 November industrial orders were up 2.7% m/m and 11.9% y/y; the German January Ifo business climate index improved to 103.4; the German February GfK consumer climate index was at 4.5%, unchanged from January’s level; and German December import prices were off 0.1% m/m and up 3.7% y/y

Last week’s high (1) was right around the 23.6% retracement of the 1.4309-1.4920 range and last week’s low (2) was right at the 61.8% retracement of the 1.4015- 1.4965 range. The 1.4812/ 1.4908/ 1.4967/ 1.5030/ 1.5120 levels represent upside resistance targets while the 1.4560/ 1.4404/ 1.4378/ 1.4239 levels represent downside support targets

CNY

The yen depreciated vis-a-vis the U.S. dollar last week as the greenback tested offers around the Y107.90 level and was supported around the Y104.95 level. The pair gained about 30 pips last week. The Nikkei 225 stock index closed at Y13,629.16. BoJ voted to keep rates unchanged at 0.5%, kept its January economic assessment unchanged, and acknowledged the markets expect a cut from the BoJ. Fukui said the BoJ plans to provide the “current accommodative financial environment for the time being.” BoJ Policy Board minutes revealed more attention is being placed on the U.S. economy.
Data released in Japan this week saw the November index of leading economic indicators upwardly revised to 18.2 from 10.0 with the coincident index downwardly revised to 30.0; December machine tool orders were upwardly revised 3.7% y/y; December supermarket sales were off 1.8% y/y; the December merchandise trade surplus fell 20.9% y/y; and the December core consumer price index rose 0.8% y/y.

The Chinese yuan appreciated vis-a-vis the U.S. dollar last week as the greenback closed at CNY 7.2102 in the over-the-counter market, down from CNY 7.2418. The government sees 2008 GDP and CPI growth of 11% and 4%, respectively and estimated 2007 CPI was up 4.8%.
Data released in China last week saw unemployment at 4.0% at the end of 2007; 2007 GDP was up 11.4%; 2007 retail sales were up 16.8%; 2007 PPI was up 3.1%; 2007 CPI was up 4.8% y/y; and December wholesale prices were up 7.6% y/y

Last week’s high (1) was just below the 23.6% retracement of the 117.92-104.96 range and last week’s low (2) was below the 76.4% retracement of the 101.67-124.13 range. Upside resistance targets remain the 107.97/ 108.96/ 109.73/ 110.04/ 111/80/ 112.89 levels while downside support targets remain the 104.19/ 101.67/ 101.20/ 98.65 levels.

£

The British pound appreciated vis-a-vis the U.S. dollar last week as cable tested offers around the US$ 1.9845 level and was supported around the $1.9335 level. The pair gained about 255 pips last week. The U.K. government favours a private-sector buyout of Northern Rock Plc. MPC officials voted 8-to-1 to keep rates unchanged this month with Blanchflower voting for a 25bps easing and policymakers reporting the inflation outlook “worsened markedly.” King noted the current 5.5% repo rate is “probably weighing down on demand.” MPC’s Sentance said the markets are ignoring upside inflation risks. M&A flows related to U.K.’s Scottish & Newscastle Plc supported sterling.

Data released in the U.K. last week saw December public sector net borrowing print at 7.8 billion; BSA December mortgage approvals fell; CML December mortgage lending fell to its lowest level since the middle of 2005; January Rightmove house prices were off 0.8% m/m; CBI January manufacturing total orders printed at +2 with the average prices balance at +21; Q4 GDP was up 0.6% q/q and 2.9% y/y; and BBA December mortgage approvals fell with mortgage lending steady.

Last week’s high (1) was above the 23.6% retracement of the 2.1160-1.9335 range and last week’s low (2) was below the 50.0% retracement of the 1.8089-2.1159 range. Upside resistance targets include the 1.9837/ 1.9937/ 2.0007/ 2.0149 levels while downside support targets include the 1.9624/ 1.9262/ 1.9182/ 1.9103/ 1.8618 levels.

CHF

The Swiss franc appreciated marginally vis-a-vis the U.S. dollar last week as the greenback tested bids around the CHF 1.0845 level and was capped around the CHF 1.1120 level. The pair lost about 10 pips last week.

Data released in Switzerland last week saw December producer and import prices rise 3.0% y/y and November retail sales were up 2.9% y/y.

Last week’s high (1) was right around the 38.2% retracement of the 1.1594-1.0836 range and last week’s low (2) was below the 23.6% retracement of the same range. Upside resistance targets include the 1.1052/ 1.1125/ 1.1215/ 1.1304/ 1.1415/ 1.1594 levels while downside support targets include the 1.0740/ 1.0629/ 1.0532 levels.

CAD

The Canadian dollar appreciated vis-a-vis the U.S. dollar last week as the greenback tested bids around the C$ 1.0010 level and was capped around the C$ 1.0380 level. The pair lost about 220 pips last week. Bank of Canada eased rates by 25bps to 4.0% and noted more easing is likely in the near-term. BoC also downwardly revised its 2008 GDP growth from its October projections and sees core and total CPI to fall below 1.5% in mid-2008 before moving higher in 2009.

Data released in Canada last week saw November wholesale sales up 0.3% m/m; the December composite leading index fell 0.1% m/m; December headline CPI rose an annualized 2.4% in December, below November’s 2.5% rate; and core CPI was up 1.5% y/y in December.

Last week’s high (1) was below the 50.0% retracement of the 1.1869-0.9055 range and last week’s low (2) was below the 38.2% retracement of the same range. Upside resistance targets include the 1.0174/ 1.0462/ 1.0794/ 1.1204 levels while downside support targets include the 0.9966/ 0.9872/ 0.9747/ 0.9482/ 0.9300 levels.

AUD

The Australian dollar appreciated vis-a-vis the U.S. dollar last week as the Aussie tested offers around the US$ 0.8850 level and was supported around the US$ 0.8510 level. The pair gained about 30 pips last week.

Data released in Australia last week saw the Q4 producer price index up 0.6% q/q; Q4 CPI was up 0.9% q/q and 3.0% y/y; and the November Westpac leading index was up 2.6 points m/m.

Last week’s high (1) was below the 23.6% retracement of the 0.7673-0.9399 range and last week’s low (2) was just below the 50.0% retracement of the same range. Upside resistance targets include the 0.8838/ 0.8992/ 0.9062/ 0.9114/ 0.9223/ 0.9340/ 0.9420 levels while downside support targets include the 0.8740/ 0.8549/ 0.8332 levels.

SCHEDULE

Sunday, 27 January 2008
all times GMT
(last release in parentheses)

2300 NZ December performance of services index
2350 Japan December corporate services price index (1.4% y/y)

Monday, 28 January 2008
all times GMT
(last release in parentheses)

N/A UK January Nationwide house prices (-0.5% m/m)
N/A UK January Nationwide house prices (4.8% y/y)
0800 Finland European Central Bank member Liikanen speaks
0900 Eurozone December M3 money supply (12.3% y/y)
1500 US December new home sales (647,000)
1500 US December new home sales (-9.0% m/m)
2330 Japan December jobless rate (3.8%)
2330 Japan December overall household spending (-0.6% y/y)
2350 Japan December large retailers’ sales (0.4%)
2350 Japan December retail trade (0.3% m/m)
2350 Japan December retail trade (1.6% y/y)

Tuesday, 29 January 2008
all times GMT
(last release in parentheses)

0030 Australia December NAB business confidence (6)
0030 Australia December NAB business conditions (15)
0715 CH December trade balance (CHF 1.89 billion)
0745 France January consumer confidence (-29)
0745 France December housing starts
0745 France December housing permits
0900 Eurozone November current account (€2.0 billion)
0900 CH December UBS consumption indicator (2.131)
1100 UK January CBI distributive trades sales
1330 US December durable goods orders (0.1%)
1330 US December durable goods orders, ex-transportation (-0.7%)
1330 Canada January business conditions orders (-3)
1500 US January consumer confidence (88.6)
1915 US Federal Open Market Committee meeting begins
2145 NZ December building permits (+0.1% m/m)
2350 Japan December industrial production (-1.6% m/m)
2350 Japan December industrial production (2.9% y/y)

Wednesday, 30 January 2008
all times GMT
(last release in parentheses)

N/A Australia December HIA new home sales (-2.6% m/m)
N/A Germany December retail sales (-1.3% m/m)
N/A Germany December retail sales (-3.2% y/y)
0000 Australia January DEWR skilled vacancies (1.9% m/m)
0200 NZ December M3 money supply (7.4% y/y)
0745 France January business survey
0830 Italy January services survey
0900 Italy January PMI, retail (44.7)
0900 France January PMI, retail (49.1)
0900 Germany January PMI, retail (44.0)
0900 Eurozone January PMI, retail (46.0)
0930 UK December M4 money supply
0930 UK December net consumer credit (£1.1 billion)
0930 UK December net lending secured on dwellings (£7.8 billion)
0930 UK December mortgage approvals (83,000)
1030 CH January KOF leading indicator (1.99)
1200 US MBA mortgage applications
1315 US January ADP employment change (40,000)
1330 US Q4 GDP, annualized (4.9%)
1330 US Q4 GDP price index (1.0%)
1330 US Q4 personal consumption (2.8%)
1330 US Q3 core personal consumption expenditures (2.0% q/q)
1700 Russia Former Federal Reserve Chairman Greenspan speaks
1915 US Federal Open Market Committee interest rate decision
2145 NZ December trade balance (-NZ$ 646.0 million)
2315 Japan January PMI, manufacturing (52.3)
2315 Japan Net equities and bonds investment

Thursday, 31 January 2008
all times GMT
(last release in parentheses)

N/A Japan January official reserve assets (US$ 973.4 billion)
N/A Germany January CPI (0.5% m/m)
N/A Germany January CPI (2.8% y/y)
N/A Germany January CPI, harmonized (0.7% m/m)
N/A Germany January CPI, harmonized (3.1% y/y)
0000 Eurozone January business climate indicator (0.92)
0030 Australia December private sector credit (1.7% m/m)
0030 Australia December private sector credit (16.2% y/y)
0100 Japan Bank of Japan Policy Board member Nishimura speaks
0130 Japan December labour cash earnings (-0.2% y/y)
0500 Japan December housing starts (-27.0% y/y)
0500 Japan December housing starts, annualizes (971,000)
0500 Japan December construction orders (-3.8% y/y)
0500 Japan January small business confidence (44.5)
0700 Germany December ILO unemployment rate (7.9%)
0745 France December producer prices (0.8% m/m)
0745 France December producer prices (4.2% y/y)
0855 Germany January unemployment rate (8.4%)
0855 Germany January unemployment, change (-78,000)
0900 Italy December hourly wages (0.2% m/m)
0900 Italy December hourly wages (2.0% y/y)
1000 Italy December PPI (0.9% m/m)
1000 Italy December PPI (4.6% y/y)
1000 Eurozone January CPI, estimate (3.1% y/y)
1000 Eurozone December unemployment rate (7.2%)
1000 Eurozone January consumer confidence (-9)
1000 Eurozone January economic confidence (104.7)
1000 Eurozone January industrial confidence (2)
1000 Eurozone January services confidence (14)
1030 UK January consumer confidence (-14)
1330 US December personal income (0.4%)
1330 US December PCE deflator (3.6% y/y)
1330 US December personal spending (1.1%)
1330 US December PCE, core (0.2% m/m)
1330 US December PCE, core (2.2% y/y)
1330 US Q4 employment cost index
1330 US Weekly initial jobless claims
1330 US Continuing jobless claims
1330 Canada November GDP (0.2% m/m)
1445 US January Chicago PMI (56.6)
2230 Australia January AIG performance of manufacturing index (57.6)

Friday, 1 February 2008
all times GMT
(last release in parentheses)

0530 Australia January RBA commodity index SDR (1.8% y/y)
0830 CH January PMI (61.3)
0845 Italy January PMI, manufacturing (50.7)
0850 France January PMI, manufacturing (53.8)
0855 Germany January PMI, manufacturing (53.6)
0900 Eurozone January PMI, manufacturing
0930 UK January PMI, manufacturing (52.9)
1330 US January non-farm payrolls, change (18,000)
1330 US January unemployment rate (5.0%)
1330 US January average hourly earnings (0.4% m/m)
1330 US January average hourly earnings (3.7% y/y)
1330 Canada December industrial product prices (0.6% m/m)
1330 Canada December raw materials price index (3.4% m/m)
1445 US January University of Michigan consumer sentiment
1500 US January ISM, manufacturing (47.7)
1500 US December construction spending (0.1% m/m)