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Andy Harrison

Good Morning,

For Today
• GBP: Opening lower after comments from an MPC member on the possibility of a cut in rates, the market held in a tight range through to the grey hours drifting just a little from the opening 1.3040 areas to edge into the 1.3030’s, Downside congestion through to stronger bids into the 1.3000 level with weak stops likely on a dip through the level with sentimental bids then holding around the 1.2950 level for limited support and stronger bids likely on a move to the 1.2900 area. Topside offers light through to the 1.3100 level with some congestion around the level and then increasing on any push higher through 1.3150 and 1.3200 being the strongest point.
• JPY: A steady climb from the opening just above the 109.50 area and rising through to the 109.65 in quiet trading and the grey hours, , Downside stops likely on a move through the 107.80 area and the market then open to the 107.50 level with some congestion and an old trendline suggesting some support and better bids congested below through to the 107.00 level, Topside offers stronger through to the 109.50 area with congestion holding the market however, beyond that the market again thickens on a push through to the 110.00 level with strong stops likely on a push through the 110.20-30 areas and opening a larger move.
• AUD: A light dip from the opening 69 cents level before recovering and steadily pushing to the 0.6920 level before running into resistance and holding in the mid-teens through to the grey hours, Topside offers from the 0.7000 area through to 0.7020 where strong offers are likely to appear and while that topside should see weak stops the offers are likely to absorb any buying and continue through to the 0.7060 areas, downside bids now again building around the 0.6850 areas and congestive bids likely to support the market for the short term through to the 0.6800 level before weakness again starts to appear on a dip through the 0.6780 areas.
• EUR: Slow drift from the opening saw the lows into the 1.1115 area before slowly pushing through the Tokyo session to test the 1.1130 level before running out of steam and holding in the area for the grey hours, Topside offers continue through to the 1.1220 area with weak stops likely in the area however, once the stops are out of the way congestion is likely to continue in strength and increase the closer the market moves towards the 1.1300 level, Downside bids light through to the 1.1100 level and bids are still likely to be building with weak stops limited with congestion likely to move through to the 1.1050 level and increasing on a dip to the 1.1020 areas.

Overnight News
AUD:
Australian AAA not at risk from Bushfires – S&P’s
GBP:
BoE MPC Member ready to cut interest rates – FT

Today’s Data
Actual – A | Consensus – C | Previous – P | Revised R | all timings GMT/UTC
AUD TD Securities Inflation YoY (DEC) A 1.4% | P 1.5%
0930 GBP Construction Output YoY (NOV) C -1.4% | P -2.1%
0930 GBP Industrial Production YoY (NOV) C -1.3% | P -1.3%
0930 GBP Manufacturing Production YoY (NOV) C -1.6% | P -1.2%
0930 GBP Monthly GDP (3m/3m) (NOV) C -0.1% | P 0.0%
0930 GBP Monthly GDP MoM (NOV) C 0.0% | P 0.0%
0930 GBP Trade Balance (NOV) C -2539m | P -5188m
0930 GBP Trade Balance Non-EU GBP/m (NOV) C -3500m | P -5729m
0930 GBP Visible Trade Balance (NOV) C -11800m | P -14486m
1900 USD Monthly Budget Statement (DEC) C 15.0b | P -208.8b
2100 NZD NZIER Business Opinion Survey
2145 NZD Building Permits MoM (NOV) P -1.1%
2350 JPY Bank Lending EX-Trusts YoY (DEC) P 2.3%
2350 JPY Bank Lending Incl. Trusts YoY (DEC) P 2.1%
2350 JPY Trade Balance – BOP Basis (NOV) C 103.8b | 254.0b

Harry Hindsight

• GBP: Choppy but limited range for the Cable when seen against the last for weeks, opening around the 1.3065 level the market made limited gains into the Tokyo session to push lightly through the 1.3070’s before drifting back to the 1.3060 level and then pushing steadily through into the grey hours testing through to the 1.3090 level and then quickly dipping back to the lows on the opening in London, then the market became decidedly choppy testing to the 1.3050 level then quickly pushing back to the 1.3090 level and down again, the move into the NYK session saw NYK pushing to the highs just short of the 1.3100 level before dropping back and then drifting to range around the 1.3060 level through to the close.
• JPY: A slow rise through the first half of the day, dipping from the opening high around the 109.55 level to test the 109.45 level then recovering on the move into the Tokyo session to test through to just below the 109.60 level before resetting and starting a slow run to the London session where the market held quietly around the 109.60 level, midmorning saw the market pushing a little higher in London before dancing around on the release of the NFP number dipping to the 109.50 level and then testing towards the 109.70 area before ranging around the 109.60 for a short period and dipping steadily through to the 109.45 area and ranging to the close around the opening levels.
AUD: A slow climb from the opening with a quiet opening making the lows in the opening period of Tokyo to hold the 0.6850 level, Tokyo bought quickly through to the 0.6870 level just after the opening and although the market dipped back to the opening levels again it started a slow but steady rise through into the grey hours holding the 0.6880 level and a quiet London session with the market ranging close to the highs through into the NYK session, NYK were steady buyers and the market managed to grind through to the 0.6910 level in the run to the close to finish the day just below the level.
• EUR: A quiet Asian session with the market holding in a very narrow range just below the 1.1100 area with only brief tests above the level through to London opening, London saw the market testing lower pushing through the 1.1090 area before recovering on the release of the NFP and back again from above the 1.1100 level and only then starting a slow steady rise through to the 1.1130 area for the high of the day with a drift back to the 1.1120 for the close.

Yesterday’s Premiership results
AUD AiG Performance of Service Index A 48.7 | P 53.7
JPY Overall Household Spending YoY (NOV) A -2.0% | C -2.0% | P -5.1%
JPY Coincident Index (NOV P) A 95.1 | C 95.2 | 95.3
JPY Leading Index CI (NOV P) A 90.9 | C 90.9 | P 91.6
CHF Unemployment Rate (DEC) A 2.5% | C 2.5% | P 2.3%
CHF Unemployment Rate s.a. (DEC) A 2.3% | C 2.3% | P 2.3%
MXN Industrial Production NSA YoY (NOV) A -2.1% | C -1.6% | P -3.0%
CAD Net Change in Employment (DEC) A 35.2k | C 25.0k | P -71.2k
CAD Unemployment Rate (DEC) A 5.6% | C 5.8% | P 5.9%
CAD Full Time Employment Change (DEC) A 38.4k | C 21.4k | P -38.4k
CAD Hourly Wage Rate Permanent Employees A 3.8% | C 4.2% | P 4.4%
USD Change in Non-farm Payrolls (DEC) A 145k | C 160k | P 266k
USD Unemployment Rate (DEC) 3.5% | C 3.5% | P 3.5%
USD Average Hourly Earnings YoY (DEC) A 2.9% | C 3.1% | P 3.1%
USD Average Weekly Hours All Employees (DEC) A 34.3 | C 34.4 | P 34.4 | R 34.3
USD Change in Private Payrolls A 139k | C 152k | P 254k
USD Baker Hughes US Rig Count (JAN10) A 781 | P 796

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