Jim Devonport
Compass Global Markets
COMPASS DAILY CURRENCY MARKET REPORT 21ST NOVEMBER 2014
The market in brief:
• AUD opens higher
• NZD also bounces off the lows
• NZ Producer Prices fall unexpectedly
• Chinese Manufacturing just stays in growth mode
• French & German Manufacturing both disappoint
• UK Retail Sales out at double expectations
• US inflation flat
• US Weekly Unemployment Claims higher
• Commodity prices recover
Market moving events for the next 24 hours:
• ECB President Draghi speaks
AUDUSD: Despite a mixed bag of data, a pickup in the price of Iron Ore and Crude Oil along with a relatively attractive price saw the Australian Dollar recover off its lows. Chinese Manufacturing was bang on the 50 level that a print either over or under shows growth or contraction; whilst US data was confusing as inflation was flat, Unemployment higher and Manufacturing stronger. The above and perhaps the fact there is absolutely nothing of note on the economic calendar today meant the market was happy to square up early as we head into the last session of the week. As forecast yesterday; the lows did hold and we’ll repeat the message that looking at next week’s economic calendar the Japanese holiday at the start and US Holiday at the end, with minimal data in between, suggests to us that the lows will continue to hold for a while yet.
AUDEUR: The Euro is slightly weaker in this pair as Manufacturing data from the two main centres of the Euro Zone fell a good 1 to 2 points below analysts’ expectations, however the single currency picked up with the general US Dollar weakness hence the muted move here. European Central Bank Chief Draghi speaks at a banking conference in Frankfurt this evening and we’ll be looking for signs of any further monetary stimulus. Looking to the charts and our forecast support of the upward channel, that’s been in play since the start of October, held firm and we see that continuing. Initial resistance sits 40 points above and then stronger at the top of the channel, EUR 2.5 cents above.
AUDGBP: A volatile but ultimately flat close for this pair as an generally stronger Australian Dollar was matched by a recovering Pound. UK Retail Sales had their healthiest print since May, coming in at +0.8% against expectations of +0.4% and versus the prior -0.4%. UK Public Sector Net Borrowing is due this evening, but unlikely to be a market moving event that it was back in the day. We favour our upward channel remaining in play, that sees support 30 points below and resistance for importers to target 1 pence higher than this morning’s open.
AUDJPY: The market was happy to keep the Yen at these weaker levels, but unwilling to take it much further. The political situations has to be decided and with no economic data due today, along with Labour Thanksgiving Day due on Monday, there is no momentum set to push this pair outside its recent range.
AUDNZD: The Tasman Cross opens with a minimal loss, having been held in an exact 50 point range all day. NZ Producer Prices disappointed, but so did Chinese Manufacturing meaning the Australian Dollar couldn’t really take advantage. The only piece of economic data due today is NZ Credit Card Spending, which should show an increase and for which I take partial blame following my recent trip to Spain. Chart wise and technical support sits just 50 points below, that is the 50% Fibonacci retracement of 2014’s NZD 8 cent range, therefore set to hold for today.
Friday Funny: So I was getting into my car, and this bloke says to me "Can you give me a lift?" I said "Sure, you look great, the world's your oyster, go for it.' Tommy Cooper
Alternative Currency Hedging: Ask us about a great alternative to traditional forward contracts that give the ability to cover at attractive levels, but with the flexibility to walk away if the rate improves or if not required.
Referrals: Client referrals are very important to our business. If you know of any contacts that can benefit from our comprehensive range of international currency transfer services, please do not hesitate to contact me. I’d be glad to assist.
Jim Devonport
The market in brief:
• AUD opens higher
• NZD also bounces off the lows
• NZ Producer Prices fall unexpectedly
• Chinese Manufacturing just stays in growth mode
• French & German Manufacturing both disappoint
• UK Retail Sales out at double expectations
• US inflation flat
• US Weekly Unemployment Claims higher
• Commodity prices recover
Market moving events for the next 24 hours:
• ECB President Draghi speaks
AUDUSD: Despite a mixed bag of data, a pickup in the price of Iron Ore and Crude Oil along with a relatively attractive price saw the Australian Dollar recover off its lows. Chinese Manufacturing was bang on the 50 level that a print either over or under shows growth or contraction; whilst US data was confusing as inflation was flat, Unemployment higher and Manufacturing stronger. The above and perhaps the fact there is absolutely nothing of note on the economic calendar today meant the market was happy to square up early as we head into the last session of the week. As forecast yesterday; the lows did hold and we’ll repeat the message that looking at next week’s economic calendar the Japanese holiday at the start and US Holiday at the end, with minimal data in between, suggests to us that the lows will continue to hold for a while yet.
AUDEUR: The Euro is slightly weaker in this pair as Manufacturing data from the two main centres of the Euro Zone fell a good 1 to 2 points below analysts’ expectations, however the single currency picked up with the general US Dollar weakness hence the muted move here. European Central Bank Chief Draghi speaks at a banking conference in Frankfurt this evening and we’ll be looking for signs of any further monetary stimulus. Looking to the charts and our forecast support of the upward channel, that’s been in play since the start of October, held firm and we see that continuing. Initial resistance sits 40 points above and then stronger at the top of the channel, EUR 2.5 cents above.
AUDGBP: A volatile but ultimately flat close for this pair as an generally stronger Australian Dollar was matched by a recovering Pound. UK Retail Sales had their healthiest print since May, coming in at +0.8% against expectations of +0.4% and versus the prior -0.4%. UK Public Sector Net Borrowing is due this evening, but unlikely to be a market moving event that it was back in the day. We favour our upward channel remaining in play, that sees support 30 points below and resistance for importers to target 1 pence higher than this morning’s open.
AUDJPY: The market was happy to keep the Yen at these weaker levels, but unwilling to take it much further. The political situations has to be decided and with no economic data due today, along with Labour Thanksgiving Day due on Monday, there is no momentum set to push this pair outside its recent range.
AUDNZD: The Tasman Cross opens with a minimal loss, having been held in an exact 50 point range all day. NZ Producer Prices disappointed, but so did Chinese Manufacturing meaning the Australian Dollar couldn’t really take advantage. The only piece of economic data due today is NZ Credit Card Spending, which should show an increase and for which I take partial blame following my recent trip to Spain. Chart wise and technical support sits just 50 points below, that is the 50% Fibonacci retracement of 2014’s NZD 8 cent range, therefore set to hold for today.
Friday Funny: So I was getting into my car, and this bloke says to me "Can you give me a lift?" I said "Sure, you look great, the world's your oyster, go for it.' Tommy Cooper
Alternative Currency Hedging: Ask us about a great alternative to traditional forward contracts that give the ability to cover at attractive levels, but with the flexibility to walk away if the rate improves or if not required.
Referrals: Client referrals are very important to our business. If you know of any contacts that can benefit from our comprehensive range of international currency transfer services, please do not hesitate to contact me. I’d be glad to assist.
Jim Devonport
Corporate & High Net Worth Client Manager
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