Daily Report: Dollar Weak as Risk Appetite Lifted by Solid Asian Data

Dollar remains broadly weak as the week starts as markets sentiments are boosted by solid Asian economic data. The preliminary HSBC China Manufacturing PMI rebounded from 49.9 to 51.1 in October, back in expansionary territory for the first time since July. HSBC noted that the data confirmed their view there is no risk of hard landing in China. Japan trade deficit narrowed to JPY -0.02T in September. Impressively, exports rose 2.4% yoy, marking the second month of growth following five month decline after the March natural disaster. Asian stock indices are broadly up today, partly following the QE3 triggered rally in US last week. Nikkei is up 1.9%, HSI up over 4%, Aussie All Ordinaries up 2.62%, crude oil is back above 88 level while dollar index is pressing 76.

After the EU summit on Sunday, no agreement was made on major issues including bank recapitalization, private sector involvements in Greece second bailout and the way to boost the EFSF. Though, one thing seemed to be sure is that using ECB to leverage the bailout fund is ruled out. The latest news flow said that policymakers are threatening to trigger a formal default on Greek debt unless banks accept losses of as much as 140B euro on their holdings or a haircut of around 50%. Both Reuters and Bloomberg also quoted the need of around 100B euro for bank recapitalization. The Reuters report also mentioned a haircut of 50% but emphasized that 'several major areas of disagreement remain', especially in the EFSF plan and 'it will require vast amounts of hard negotiation between Sunday and Wednesday to strike a deal that convinces financial markets and Europe's major trading partners that the crisis is in hand' while according to the Bloomberg report policymakers are heading toward using the EFSF to 'guarantee bond sales as a way to extend its reach. A second option is to set up an EFSF-insured fund that would seek outside investment in troubled bonds'. 

Data from Australia saw PPI rose less than expected by 0.6% qoq, 2.7% yoy in Q3. The year over year rate was much lower than Q2's 3.4%. The data is arguing inflationary pressures have eased further in Australia. RBA would be on hold for longer than expected and is raising the prospect of a rate cut if global economic conditions deteriorate further. Though, the CPI data to be released later this week will be more crucial in near term rate outlook.

Looking ahead, Eurozone PMI data will be the main focus. German PMI manufacturing is expected to drop slightly to 50 in October PMI services is expected to recovery to 49.8. Eurozone PMI manufacturing and services are expected to drop to 48.1 and 48.5 respectively. Eurozone industrial orders are expected to rise 0.1% mom in August.

EUR/AUD Daily Outlook

Daily Pivots: (S1) 1.3350; (P) 1.3424; (R1) 1.3463;

EUR/AUD's fall from 1.4086 resumed by taking out 1.3368 and reaches as low as 1.3327 so far today. Intraday bias is back on the downside and further decline should be seen to retest 1.3022 support next. On the upside, note that break of 1.3497 resistance, though, will indicate short term bottoming, possibly on bullish convergence condition in 4 hours MACD, and will bring stronger rebound.

In the bigger picture, price actions from 1.2926 are treated as a medium term consolidation pattern, which is still in progress. Such pattern might extend further in range of 1.2926 and 1.4341. Nevertheless, we'll stay bearish as long as 1.4341 resistance holds and favor an eventual downside breakout. Sustained trading below 1.2926 should pave the way to 1.2 psychological level next. 

Economic Indicators Update

MT	Ccy	Events	Actual	Consensus	Previous	Revised
23:50	JPY	Trade Balance (JPY) Sep	-0.02T	-0.11T	-0.29T	-0.27T
0:30	AUD	PPI Q/Q Q3	0.60%	0.80%	0.80%
0:30	AUD	PPI Y/Y Q3	2.70%	2.90%	3.40%
4:00	CNY	HSBC Flash China Manufacturing PMI Oct	51.1		49.9
7:30	EUR	German PMI Manufacturing Oct A		50	50.3
7:30	EUR	German PMI Services Oct A		49.8	49.7
8:00	EUR	Eurozone PMI Manufacturing Oct A		48.1	48.5
8:00	EUR	Eurozone PMI Services Oct A		48.5	48.8
9:00	EUR	Eurozone Industrial New Orders M/M Aug		0.10%	-2.10%

Market Salutes Mass Confusion with Further Risk Rally

The coming “solution” to the EU’s debt crisis is creating ever mounting piles of research outlining the if’s, and’s and but’s – so the market shrugs its shoulders and says “they’ll figure something out.”

The discussion surrounding the potential form of the EFSF has become an endlessly confusing cacophony for which readers can find far better sources than this column to review and understand all of the various nuances of the proposed solutions and the questions outstanding. The bulls have largely made their case on the potential outcome for what is now next Wednesday (Summit, part Two) with the extensive rally in the rear view mirror. The bears are licking their wounds and still running for cover. The essential bottom for the bigger picture here boils down to three interlocking questions, none of which are likely to be answered beyond the next couple of weeks to couple of months, in my view.

Confidence? All of the solutions rely on the market’s confidence and the hope that officialdom has gone far enough in back-stopping sovereign debt to a sufficient degree far more than the actual deployment of funds. The solution is more one of – if something goes wrong, we’ll be there – trust us! It works as long as market participants believe it will work, in other words. But if enough confidence is lost and the actual mechanisms are being tested, is there really enough firepower in place? Which leads us to the next question…

Where is the money? The issue of leverage has not been resolved. Yes, an all-out money printing fiesta from the ECB or something closer to what the French wanted could have generated a more QE2-like large scale liquidity-induced rally, but none of the currently more likely sounding resolutions generate huge liquidity – only implied liquidity via backstopping. This is a highly complex, have-our-cake-and-eat-it-too tight money solution to the situation.

A closer union or not?  The risk at all times given the incredibly cumbersome EU framework is one of one more bad actor spoiling the party – Greek exceptionalism in this department is an awfully risky assumption. Most are discussing Greek defaults only. Every round of this crisis has shown how tenuous the political EU framework remains, and the trend doesn’t appear to be toward a firmer commitment to union, but rather the opposite. The framework may survive this round, but what about the next one?

These are awfully big questions. Yes, we could see confidence for a time because yes, there may be enough funding for the center to hold – but the third question is the real challenger down the line. If the confidence fails because more money is needed or more money is needed because confidence fails, the political will for another round of bailouts is unlikely to be there as our Chief Economist said in yesterday’s Chronicle – maximum intervention will eventually yield to Crisis 2.0, whether it is in this quarter or not until next year.

Meanwhile, back in the East
Two things going on in Asia at the moment: China’s equity market is looking very shaky and satellite indicators like the price of copper are a significant cause for concern, particularly given copper’s odd use in China’s collateralized credit market in recent years. Meanwhile, AUDUSD is following equity markets and the Euro-phoria rather than its more traditional orientation with industrial commodities – an awkward path at best for the currency. The direction of AUDUSD and copper/China indicators is unlikely to diverge for much longer – one of the two markets is “wrong”.

Elsewhere, complacent USDJPY longs were attacked in the early US hours as the USD was crumbling across the board in today’s trade as risk appetite stormed higher and 76.0 was taken out as USDJPY briefly touched a new all-time low. There is risk of further downside if Japanese officialdom prefers to wait for the other side of the G20 to make its presence more forcefully felt. The move lower is actually at odds with the interest rate spreads at the short end of the US/Japanese yield curves, though there has been a general move away from these kinds of correlations holding much sway of late.

Looking ahead
So what are the potential outcomes once we are on the other side of next week’s EU summit and the G20 in early November? A further extension of the rally for the shorter term is quite possible if the EU solution continues to generate more complacency – so we have to allow for, for example, EURUSD to challenge anything from its 55-day MA above 1.3900 to its 200-day MA above 1.40. But that’s our line in the sand, as we discuss in the chart below.

EURGBP pulled a number on the market today – as EURGBP took out downside stops before rallying well back into the range, a move that makes sense as GBP and USD are in similar boats and their general direction versus the EUR is likely to remain loosely correlated at minimum.

Chart: EURUSD scenarios
Assuming that the EURUSD isn’t preparing for a full trend change to the upside, the scenario indicated on the chart below is a possible trajectory for the pair – a brief further extension of the rally as we head into/out of the EU Summit followed by a reversal and then disappointment further down the line. If the pair remain above 1.40 for any length of time, we’ll have to reconsider our assumptions.

Have a great weekend and stay careful out there.


Economic Data Highlights

• Germany Oct. IFO out at 106.4 vs. 106.2 expected and 107.4 in Sep.
• Canada Sep. CPI out at +0.2% MoM and +3.2% YoY vs. +0.2%/+3.1% expected, respectively and vs. +3.1% in Aug.
• Canada Sep. CPI Core out at +0.5% MoM and +2.2% YoY vs. +0.2%/+2.0% expected, respectively and vs. +1.9% YoY in Aug.

Upcoming Economic Calendar Highlights (all times GMT)

• US Fed’s Kocherlakota to Speak (1700)
• US Fed’s Fisher to Speak (1720)
• US Fed’s Yellen to Speak (1900)
• US Fed’s Duke to Speak (Sat 1400)
• Japan Sep. Merchandise Trade Balance (Sun 2350)
• Australia Q3 Producer Price Index (0030)
• China Oct. HSBC Flash Manufacturing PMI (0230)

Daily Report: Sentiments Reversed Again as Expectations for EU Summit Change

News from Eurozone continues to drive markets up and down. This time, sentiments were hurt by reports that France and Germany are clearly still having diverged stance on the role of ECB in solving the debt crisis. France is still pushing the proposal to have the EFSF turned into a bank licensed with ECB for leveraging the capacity. But Germany maintained its opposition to this idea. And European officials are playing down the expectation for this weekend's EU summit. German Chancellor Angela Merkel stated that 'it won't be the final point where we regain the confidence of others, but it will be a stepping stone, a marker on the road' and 'all of the sins of omission and commission of the past cannot be undone by waving a magic wand'. EC President Jose Barroso also said that 'even if we do arrive at a political decision on everything that's on the table, which I hope we will, that doesn't necessarily mean that there will not then have to be an implementing phase'.

The US monthly Beige Book covering the period on the before October 7 indicated that many districts described the pace of growth as 'modest' or 'slight' and there was higher uncertainty for business decision making, although economic activities continued to expand. Consumer spending improved 'slightly' in most districts as driven by auto sales and tourism. Business spending also increased due to the rise in expenditure in construction and mining equipment and auto dealer inventories. Yet, restraints in hiring and capital spending remained. While the October report may be slightly better than the previous one, economic outlook on the US remained uncertain and is highly determined by global factors. 

It's reported that Japan will set up a task force to tackle the problems caused by yen's persistent strength. The task force will involve vice cabinet ministers and a BoJ deputy governor. The fund shifted to state-run Japan Bank for International Cooperation to help exporters would be boosted by 25% from JPY 8T to JPY 10T. In addition, there was also call for BoJ to use "bold" monetary policy in close coordination with the government to manage the yen.

On the data front, UK retail sales will be a main feature in European session, together with Swiss ZEW expectations. From US, initial jobless claims are expected to remain elevated at 400k. Existing home sales is expected to drop to 4.90m in September, leading indicator rose 0.2%. Philly Fed survey is expected to improve to -9.5 in October.

EUR/JPY Daily Outlook

Daily Pivots: (S1) 105.15; (P) 105.84; (R1) 106.36; 

At this point, we're still favoring the case that EUR/JPY's rebound from 100.74 is finished at 107.67 already. Below 104.77 will extend the fall from 107.67 to retest 100.74 low first. On the upside, though, above 107.67 will invalidate this immediate bearish view and bring another rise. But upside should be limited by 38.2% retracement of 123.31 to 100.74 at 109.36 to finish off the rebound.

In the bigger picture, whole down trend from 2008 high of 169.96 is still in progress and is building up downside momentum again. Sustained trading below 100 psychological level should pave the way to 100% projection of 139.21 to 105.42 from 123.31 at 89.52, which is close to 88.96 all time low. On the upside, break of 111.93 resistance is needed to be the first signal of medium term reversal. Otherwise, we'll stay bearish. 

Economic Indicators Update

MT	Ccy	Events	Actual	Consensus	Previous	Revised
0:30	AUD	NAB Business Confidence Q3	-4		6	5
6:00	EUR	German PPI M/M Sep	0.30%	0.20%	-0.30%
6:00	EUR	German PPI Y/Y Sep		5.50%	5.50%
6:00	CHF	Trade Balance (CHF) Sep		1.37B	0.81B
8:30	GBP	Retail Sales M/M Sep		0.20%	-0.10%
8:30	GBP	Retail Sales Y/Y Sep		0.60%	-0.10%
8:30	GBP	Retail Sales w/Auto Fuel M/M Sep		0.00%	-0.20%
8:30	GBP	Retail Sales w/Auto Fuel Y/Y Sep		0.60%	0.00%
9:00	CHF	ZEW Survey (Expectations) Oct			-75.7
12:30	USD	Initial Jobless Claims		400K	404K
12:30	CAD	Wholesale Sales M/M Aug		0.40%	0.80%
14:00	EUR	Eurozone Consumer Confidence Oct A		-20.1	-19.1
14:00	USD	Existing Home Sales Sep		4.90M	5.03M
14:00	USD	Leading Indicators Sep		0.20%	0.30%
14:00	USD	Philly Fed Survey Oct		-9.5	-17.5
14:30	USD	Natural Gas Storage		111B	112B

Storming Aussie Employment Data, but China trade Data Halts AUD

Asia saw a busier day on the macroeconomic front Thursday, and though there were arguments for both risk-on and risk-off, currencies remained at the top of their ranges.

For the pro-risk brigade, Australia’s employment data was a stormer with 20.4k jobs added in September, more than the 10.0k expected and more than compensating for the revised 10.5k jobs lost in August and halting a 2-month declining streak. Jobs gains were spread almost evenly between full-time and part-time workers and an unchanged participation rate of 65.6% was enough to tilt the unemployment rate a tad lower to 5.2% from 5.3%. Seen as a solid number, the AUD rocketed higher across the board with AUDUSD reaching 3-week highs.

After we had settled at higher levels, the China trade data was released and slightly disappointed. The trade surplus shrunk for the second successive month, declining to +$14.51 bln from +$17.76 bln with a drop in exports seen as the main culprit. Exports grew “only” 17.1% y/y and, perhaps more disappointingly, growth in imports fell to +20.9% y/y after recording 30.2% y/y in August. This took some of the shine off the AUD’s gains and AUDUSD retreated sub-1.02 again.

During the session we had additional dovish comments from BOE’s Bean who felt the outlook for the UK economy had worsened in the past 3-4 months which, if prolonged, would need an additional round of QE. He was of the opinion that inflation will cool in 2012, just in time for the Olympics! His comments on the economy echoed those we heard from BOE’s Dale who expressed concern about UK growth prospects for the rest of the year. GBP traded sidelined for most of the Asian session though.

The broader risk-on trade had extended overnight to the detriment of the greenback with a number of events forcing the EUR squeeze higher. Slovakian leaders said a second EFSF vote was likely by week-end and expected to pass while the EU Commission offered a framework for a European bank recapitalization plan. Euro-zone data was also impressive with industrial production up 1.2% m/m, 5.3% y/y, well above forecasts and higher than the previous month. EURUSD squeezed up to 1.3830+, one-month highs, before finding some resistance.

Economic Data Highlights

• CA Aug. New Housing Price Index out at +0.1% m/m, +2.3% y/y, both as expected and unchanged from prior
• US Aug. JOLTs Job Openings out at 3,056 vs. revised 3,213 prior
• NZ Sep. Business PMI out at 50.8 vs. revised 52.7 prior
• JP Sep. Bank Lending out at -0.3%y/y vs. -0.5% expected and -0.5% prior
• JP Aug. Tertiary Industry Index out at -0.2%m/m vs. -0.3% expected and revised -0.3% prior
• AU Oct. Consumer Inflation Expectation out at 3.1% vs. 2.8% prior
• AU Sep. Employment Change out at +20.4k vs. 10.0k expected and revised -10.5k prior
• AU Sep. Unemployment Rate out at 5.2% vs. 5.3% expected and 5.3% prior
• China Sep. Trade Balance out at +$14.51b vs. +$16.3b expected and +$17.76b prior
• China Sep. Exports out at +17.1% y/y vs. +20.5% expected and +24.5% prior
• China Sep. Imports out at +20.9% y/y vs. 24.2% expected and 30.2% prior

Upcoming Economic Calendar Highlights
(All Times GMT)

• GE CPI (0600)
• Swiss PPI (0715)
• Sweden Unemployment rate (0800)
• UK Trade Balance (0830)
• CA Int’l Merchandise Trade (1230)
• US Trade Balance (1230)
• US Initial Jobless Claims (1230)
• US Bloomberg Consumer Comfort (1345)
• US Fed’s Kocherlakota to speak (1830)

Euro Squeeze Over With Ahead of Trichet’s Last Stand?

Tomorrow is Trichet’s last press conference as head of the ECB. While an interest rate cut is likely not in the cards and might be seen as a reason for a further squeeze on Euro bears, other factors may weigh more heavily.

UK Data and BoE pre-preview for tomorrow
The UK PMI Services data was rather strong today – at 52.0 vs. 50.5 estimated and an improvement from 51.1 in August. This did very little to help the sterling’s case, however, as the general focus on Euro-relief (or at least a Euro-squeeze) saw EURGBP remaining rather buoyant and GBPUSD was in no hurry to tack onto yesterday’s bounce. The GDP and consumption data from Q2 were a downer (increased government spending obviously accounting for all of the GDP growth), meanwhile, and confidence surveys have been very poor lately, so there may be little bearing on the timing of the BoE’s additional asset purchase expansion. Odds are perhaps 50/50 heading into tomorrow’s BoE meeting on an expansion of the target, with a consensus of 50B for those who think an expansion is on the way and a smattering looking for 100B.

Odds and ends
A fine example of how the AUD is more a product of volatility in risk in the shortest of short terms rather than from moves on fundamental indicators like rate expectation. Tuesday’s 17-tick jump in Sep 2012 STIRs saw the AUDUSD  fall a further 100 pips or so (to be fair, the pair had been selling off steeply), but then a sharp wall street rally late yesterday, and mixed Aussie data (great retail sales, weak services survey) saw the same STIR off about 3 ticks, but AUDUSD rallying as much as 200 pips.

The US ADP employment change number was more or less in-line with expectations and with last month’s data (91k vs. 89k last month) and vs. last month’s Verizon strike-affected +17k US private payrolls number. In the meantime, some of the weekly jobless claims numbers ticked much higher before last week’s apparently calendar-affected low claims number. A bit more worrisome was the Challenger job cut survey that showed mass firing plans were the largest in more than two years, with Army and Bank of America cuts accounting for 70% of the total.  It all adds up to a yawn or slightly negative surprise this Friday, barring any dramatic evidence from the ISM non-manufacturing employment sub-index out a bit later today.

A great FTAlphaville article discusses the difficulties in addressing the Euro-debt situation, as it quickly becomes clear that anything short of a blanket guarantee will mean continued uncertainty, even if it is theoretically possibly to construct a credible haircut on Greece and some of the other peripheral countries and recapitalize banks. Meanwhile, Italy suffered the massive downgrade overnight and Merkel is not playing ball with the pro-EuroBond contingent, so the situation isn’t going much of anywhere at the moment as we await the ECB's next moves.

Chart: EURUSD
EURUSD reached its first major resistance area just below 1.3400 as we await tomorrow’s ECB outcome. (more on that below.) Above that, and we have 1.35 to contend with as the next resistance area of note.

Looking ahead – ECB pre-preview
Remember that tomorrow is Trichet’s last press conference at regular ECB meetings as Draghi is scheduled to take over at the end of this month. While many are predicting a rate cut from the ECB, it is hard to believe that Mr. Vigilance Trichet would want to leave the bank with a rate cut after having hiked as recently as July of this year. Leave it for the following meeting… More important will be further signals on the ECB’s plans to relieve the pressure on European bank funding as the general expectation is that Mr. Trichet will announce the reintroduction of unlimited 12-month funding but perhaps most importantly, will the ECB announce a new covered bond purchase program? Odds are perhaps even on the latter. And if it does launch such a program, will the move be seen as Euro positive because of the immediate relief. After all, is not a bond purchase program (despite vague possible claims that any purchases would somehow be sterilized) the same as the BoE expanding its asset purchase target. Very intriguing to see how the market will judge the ECB’s actions in addition to what the ECB does. Eventually, the only thing that keeps the banks liquid is effectively QE.

Economic Data Highlights

• Germany Sep. Final PMI Services survey lowered to 49.7 vs. original 50.3 estimate
• Euro Zone Sep. Final PMI Services survey lowered to 48.8 vs. original 49.2 estimate
• UK Sep. PMI Services survey out at 52.9 vs. 50.5 expected and 51.1 in Aug.
• UK Q2 GDP revised down to 0.1% QoQ and +0.6% YoY vs. +0.2%/+0.7% original estimates, respectively
• UK Q2 Private Consumption dropped -0.8% QoQ vs. -0.3% expected
• UK Q2 Government Spending rose +1.1% QoQ vs. -0.1% expected
• US Sep. Challenger Job Cuts out at +211.5% YoY vs. +47.0% in Aug.
• US Sep. ADP Employment Change out at +91k vs. +75k expected and +89k in Aug.

Upcoming Economic Calendar Highlights (all times GMT)

• US Sep. ISM Non-manufacturing (1400)
• US Weekly DoE Crude Oil and Product Inventories (1430)

Daily Report: Euro Off as Greece Decision Delayed Again, Aussie Down as RBA Turned Dovish

Euro extends recent decline broadly after the six-hours EU finance ministers meeting in Luxemburg yielded few concrete conclusion on the Greece and the measures to contain European debt crisis. Belgian Finance Minister Reynders noted that they're informed by Greece that funds will have to be made available in "mid-November" and EU will now wait for the report from troika to decide on release the next tranche of bailout fund. Nonetheless, EU President Juncker later assured that there's "no one advocating a default for Greece" and it will be avoided. Focus will turn to next meeting on October 13 and it's still doubtful whether the decision will be delayed once again. Meanwhile, the finance ministers are also reviewing the size of private sector involvement in the second bailout for Greece.

Regarding the discussion on expanding and leveraging the EFSF, it appears that the possibility is low as finance ministers are divided on the issue. Bank of France Governor Noyer said he supported leveraging the fund. However, it's unrealistic to expect an increase in the beefed-up rescue fund and it's unlikely for leverage. Juncker said the ceiling of the rescue fund shouldn't be raised and the ECB should not be involving in any future leveraging of the fund. German Finance Minister Schaeuble said that expansion talk was premature as 3 countries have yet to even ratify the EFSF plan agreed in July.

Japanese Finance minister Azumi urged Europe to "make the process of rescuing Greece more transparent to the markets" in order to "halt the extreme strength in the yen and weakness in the euro". after EUR/JPY drops to decade low and is heading towards 100 psychological level. There are increasing speculation that Japan will target the next intervention move towards EUR/JPY even though such speculation is premature for the moment.

Fed debuted that operation twist program yesterday by buying USD 2.5b in treasuries maturing in 25-30 years. 30 year yield dived to close to 2.761% overnight, hitting the lowest level in almost three years. 10 year yield also dropped to 1.785%. Bernanke will appear before the Join Economic Committee today on economic outlook and would likely face questions on how effective the operation twist will be.

Aussie extends recent fall against dollar and breaches 0.95 level today on risk aversion and as RBA turned dovish. As expected, the RBA left the cash rate unchanged at 4.75%. Yet the post-meeting statement came in more dovish than the previous one. Governor Glenn Stevens downplayed impacts of recent deterioration US and European outlook. Nevertheless, it now appears more likely that the central bank will consider a rate cut in coming months if inflation is under control. We retain our view that a rate cut will be carried out in the fourth quarter. 

AUD/JPY extends recent down trend this week as reaches as low as 72.46 so far. Near term outlook remains bearish as long as 76.65 resistance holds and we'd expect further fall to 71.84 support next. Current development is also inline with the view that whole medium term rise from 2008 low of 55.09 is already completed at 90.01 and deeper fall should be seen to 61.8% retracement of 55.09 to 90.01 at 68.42 and below. 

EUR/JPY Daily Outlook

Daily Pivots: (S1) 100.19; (P) 101.70; (R1) 102.47; 

EUR/JPY's fall is still in progress and reaches as low as 100.74 so far today. Intraday bias remains on the downside for 100 psychological level. Break will target 200% projection of 123.31 to 113.41 from 117.74 at 97.94 next. On the upside, above 102.22 minor resistance will turn bias neutral and bring consolidations. But break of 104.92 resistance is needed to signal short term bottoming. Otherwise, outlook will remain bearish.

In the bigger picture, whole down trend from 2008 high of 169.96 is still in progress and is building up downside momentum again. Sustained trading below 100 psychological level should pave the way to 100% projection of 139.21 to 105.42 from 123.31 at 89.52, which is close to 88.96 all time low. On the upside, break of 111.93 resistance is needed to be the first signal of medium term reversal. Otherwise, we'll stay bearish. 

EUR/USD Daily Outlook

Daily Pivots: (S1) 1.3098; (P) 1.3240 (R1) 1.3313; 

EUR/USD drops further to as low as 1.3163 today so far and intraday bias remains on the downside for 161.8% projection of 1.4939 to 1.3969 from 1.4548 at 1.2979, which is close to 1.3 psychological level. On the upside, above 1.3381 minor resistance will turn bias neutral and bring consolidations. But break of 1.3689 resistance is needed to signal short term bottoming. Otherwise, outlook will remain bearish.

In the bigger picture, current development indicates that medium term rise from 1.1875 has completed with three waves up to 1.4939 already. That also suggests that it's merely part of the consolidation pattern that started back in 2008 at 1.6039. Further decline would now be seen to 1.2873 support first and break will target 1.1875 and below. On the upside, above 1.4548, resistance is needed to confirm completion of the fall from 1.4939 or we'll stay bearish in EUR/USD.

USD/CHF Daily Outlook

Daily Pivots: (S1) 0.9122; (P) 0.9170; (R1) 0.9262; 

USD/CHF's break of 0.9182 resistance confirms resumption of recent rally from 0.7065. Intraday bias remains on the upside and further rally should be seen to 161.8% projection of 0.7065 to 0.8246 from 0.7710 at 0.9621 next. On the downside, break of 0.8917 support is needed to signal short term topping. Otherwise, outlook will remain bullish in near term.

In the bigger picture, medium term down trend from 1.1730 is already completed at 1.7065. But there is no indication of long term reversal yet. Rebound from 0.7065 is treated as part of a medium term consolidation pattern. Such rebound would possibly extend to 0.9916/1.1730 resistance zone. But strong resistance should be seen there and bring reversal. On the downside, break of 0.7710 is needed to indicate completion of the rebound from 0.7065. Otherwise, we'll stay near term bullish in the pair for the moment.

 Economic Indicators Update

GMT	Ccy	Events	Actual	Consensus	Previous	Revised
23:50	JPY	Monetary Base Y/Y Sep	16.70%	16.30%	15.90%
0:30	AUD	Trade Balance (AUD) Aug	3.10B	2.14B	1.83B	1.82B
0:30	AUD	Building Approvals M/M Aug	11.40%	1.00%	1.00%	1.80%
1:30	JPY	Labor Cash Earnings Y/Y Aug	-0.60%	0.70%	-0.10%	-0.20%
3:30	AUD	RBA Rate Decision	4.75%	4.75%	4.75%
8:30	GBP	PMI Construction Sep		51.6	52.6
9:00	EUR	Eurozone PPI M/M Aug		-0.20%	0.50%
9:00	EUR	Eurozone PPI Y/Y Aug		5.80%	6.10%
14:00	USD	Fed Chairman Bernanke Testifies
14:00	USD	Factory Orders Aug		-0.10%	2.40%

Euro Weak in the Knees Again as Week/Month/Quarter Ends

The Euro ground lower today after a German minister said further EFSF expansion was not likely and despite a very high CPI estimate for September. Bonds rebounded from key support and risk remains on the defensive.

The US and German 10-year benchmarks continued to flirt with the 2 percent yield level, but both have failed to take out that support level and the strong rebound in bonds today suggested a renewed bout of safe haven seeking, particularly after a very high Euro Zone September CPI estimate failed to generate sustainable selling interest. Ahead of today’s trading session, Germany’s economy minister Roesler said in a television interview that German lawmakers were unlikely to approve another raising of the EFSF ceiling or an effective increase in the fund through leveraging. Among our usual indicator suspects: Euro 3-month basis swaps also eased another couple of bps lower (more pressure on Euro) and Italian/German yield spreads widened out again by the early US hours after attempting to tighten earlier in the day.

The action in bond markets is spilling over to JPY crosses as today marks the end of the first half of the year in Japan and the end of the quarter for the rest of the financial world. EURJPY topped  out again well above 104 but was pushed sharply back lower on the enthusiastic rally in Bunds today. It is interesting that USDJPY remained joined at the hip despite considerable volatility in rate spreads between the US and the Japan this week – apparently the market is content to express the volatility in rate spreads in non-USD terms, but USDJPY can’t remain in a vice grip forever. The Bank of Japan will see considerable pressure if we get another wave of risk off soon and global government bond yields probe their recent cycle lows.

Looking ahead
Some of the moves yesterday across markets certainly looked a bit like they might have been driven by end of month/quarter flows and that kind of activity could continue for the rest of the day today. This week has mostly been one vicious churn for those looking for a directional move – though a swoon in risk in the US session today could put an exclamation point on weekly candlesticks. Next week offers plenty in the way of even risks, certainly worth mentioning here, though we are likely to refresh this list on Monday:

• Central Bank Meetings: RBA (Wednesday) and ECB, BoE (Thursday), BoJ (Friday)
• Euro Zone: EcoFin meetings on Monday and Tuesday
• US Data: ISM Manufacturing (Monday), ISM Non-Manufacturing (Wednesday), US Employment Report (Friday)
• Other Highlights: Japan Q3 Tankan (Monday) Fed’s Bernanke to Testify (Tuesday) Canada Employment Report (Friday)

The Bernanke appearance on Tuesday will be an interesting appearance before the Joint Economic Committee, which includes Ron Paul, who will likely take the opportunity once again to bash the Fed and demand it be audited. Let’s not forget he’s a presidential candidate with a campaign in need of a boost as well.

Chart: AUDUSD Weekly 
AUDUSD challenging key levels last week and this week, confirming the huge trendline break from the 2009 lows. From here, there is a gap down to the sub-94 area and then not much to hold the pair until 0.8250. 

We asked this Monday whether the market might be treacherous for the balance of the week. (“Could heavy positioning and heavy batch of event risks mean more of this kind of churn in markets for the rest of the week?”) Next week is unlikely to yield the same result – either the risk bears give up here for a short while and the range expands upward a bit (though without changing secular trend) or the action heats up again to the downside and we start to see a full capitulation unfolding. Regardless, it behooves all of us to be careful out there, particularly since, given the backdrop, the odds of the latter remain elevated.


Economic Data Highlights

• Germany Aug. Retail Sales out at -2.9% MoM vs. -0.5% expected
• Norway Sep. Unemployment Rate out at 2.5% vs. 2.6% expected and 2.7% in Aug.
• Norway Aug. Credit Growth Indicator out at +6.5% YoY vs. +6.3% expected and +6.3% in Jul.
• Euro Zone Sep. CPI Estimate out at +3.0% YoY vs. +2.5% expected and +2.5% in Aug.
• Switzerland Sep. KOF Swiss Leading Indicator out at 1.21 vs. 1.30 expected and 1.61 in Aug.
• US Personal Income out at -0.1% MoM vs. +0.1% expected
• US Personal Spending out at +0.2% MoM as expected 
• US PCE Core out at +0.1% MoM and +1.6% YoY vs. +0.2%/+1.7% expected, respectively and vs. +1.6% in Jul.
• Canada Jul. GDP rose +0.3% MoM and +2.3% YoY as expected and vs. +2.1% in Jun.

Upcoming Economic Calendar Highlights (all times GMT)

• Chicago Sep. Chicago PMI (1345)
• US Sep. Final University of Michigan Confidence (1355)
• US Sep. NAPM – Milwaukee (140)
• US Fed’s Bullard to Speak (1500)
• China Sep. PMI Manufacturing (Sat 0100)
• Australia Sep. AiG Performance of Manufacturing Index (Sun 2230)
• Japan Q3 Tankan survey (Sunday 2350)
• China Sep. Non-manufacturing PMI (Mon 0100)

Daily Report: NZD Lower after Downgrade, Dollar Building Up Momentum

New Zealand dollar is noticeably lower in another quiet Asian session after rating downgrade. Meanwhile, exporters buying send Japanese yen generally higher. Sentiments are still weak in the markets but was somewhat steady as the HSBC China Manufacturing PMI was revised higher to 49.9 in September. Technically speaking, major currencies' recovery against dollar has been losing momentum and there are signs of selloff resumption. USD/CAD takes the lead by breaking 1.0390 resistance. We'll see if dollar regains momentum against as the quarter closes.

Fitch's and S&P's downgraded New Zealand's credit rating amid concerns over the country's fiscal deficits. Fitch trimmed New Zealand's rating to AA from AA+, citing the country's high level of net external debt is an outlier among rated peers - a key vulnerability that is likely to persist as the current account deficit is projected to widen again'. S&P also lowered the country's rating by 1 notch after the 'assessment of the likelihood that New Zealand's external position will deteriorate further'. The downgrades are expected to increase borrowing costs of New Zealand. They will also make it more difficult for the RBNZ to remove the emergency cut implemented after the earthquake.

Sterling is relatively resilient against Euro as an SNB official said the bank will increase Sterling holdings in reserves "in a year's time". Current, the bank is holding 3% of its reserves in the pound which is significantly lower than the 10% between 2004 and 2005. On the other hand, it's holding 55% reserves in Euro, which markets are expecting SNB to reallocate after setting the floor on EUR/CHF. Meanwhile, there are also some support to sterling as Gfk consumer confidence unexpectedly improved to -30 in September.

Yen is broadly higher today as Japanese exports sold both euro and dollar at the end of the fiscal half-year and buy back the yen. But gain is so far limited after Finance Minister Jun Azumi said a further JPY 15T would be authorized or market intervention, bringing the amount up to a record JPY 46T. Azumi also noted that "the recent 75- to 80-yen range could pour cold water on the Japanese economy's recovery,: suggesting the government is deeper concerned with USD/JPY a the current level.

On the data front, New Zealand building building permits rose 12.5% mom in August while NBNZ business confidence dropped to 30.3 in September. UK Gfk consumer sentiments improved to -30 in September. Japan manufacturing PMI dropped to 49.3 in September. Household spending dropped -4.1% yoy in August while jobless rate dropped to 4.3%, industrial production rose 0.8% mom, housing starts rose 14% in August. National CPI core rose 0.2% yoy in August. Look gin ahead, Eurozone CPI flash and Swiss KOF will be the main focus in European session while Canada GDP and US personal income and spending will be the main focus in US session. 

USD/CAD Daily Outlook

Daily Pivots: (S1) 1.0276; (P) 1.0338; (R1) 1.0421; 

USD/CAD rises to as high as 1.0407 so far today and the break of 1.0385 indicates that recent rebound from 0.9406 has resumed. Intraday bias is back on the upside and further rally should be seen towards 161.8% projection of 0.9406 to 1.0009 from 0.9725 at 1.0701 next. On the downside, below 1.0256 minor support will turn bias neutral. Further break of 1.0142 support will suggest short term topping, possibly with bearish divergence condition in 4 hours MACD, and bring deeper pull back.

In the bigger picture, sustained trading above 55 weeks EMA affirms the case that whole down trend from 2009 high of 1.3063 has finished at 0.9406 on bullish convergence condition in weekly. Current rally from 0.9406 should now target 1.0851 resistance (38.2% retracement of 1.3063 to 0.9406 at 1.0803). Break there will extend the rebound to 61.8% retracement 1.1666. On the downside, break of 0.9725 support is needed to confirm completion of the rise from 0.9406. Or, we'll stay bullish in the pair.

EUR/USD Daily Outlook

Daily Pivots: (S1) 1.3516; (P) 1.3598 (R1) 1.3676; 

With 1.3477 minor support intact, EUR/USD's recovery form 1.3362 might extend further. But after all, the current rise is treated as a correction in the larger decline only. Hence, we'd expect upside to be limited by 1.3936 resistance and bring fall resumption. Below 1.3477 minor support will flip bias back to the downside. Further break of 1.3362 will target 161.8% projection of 1.4939 to 1.3969 from 1.4548 at 1.2979, which is close to 1.3 psychological level.

In the bigger picture, current development indicates that medium term rise from 1.1875 has completed with three waves up to 1.4939 already. That also suggests that it's merely part of the consolidation pattern that started back in 2008 at 1.6039. Further decline would now be seen to 1.2873 support first and break will target 1.1875 and below. On the upside, above 1.4548, resistance is needed to confirm completion of the fall from 1.4939 or we'll stay bearish in EUR/USD.

EUR/JPY Daily Outlook

Daily Pivots: (S1) 103.53; (P) 104.23; (R1) 105.15; 

With 103.00 minor support intact, EUR/JPY's recovery from 101.93 might extend further. But after all, it's treated as a correction in the larger decline only. Hence, we'd expect upside to be limited by 106.98 resistance and bring fall resumption. Below 103.00 minor support will flip bias back to the downside for 101.93 and then 100 psychological level.

In the bigger picture, whole down trend from 2008 high of 169.96 is still in progress and is building up downside momentum again. Sustained trading below 100 psychological level should pave the way to 100% projection of 139.21 to 105.42 from 123.31 at 89.52, which is close to 88.96 all time low. On the upside, break of 123.31 resistance is needed to confirm trend reversal or we'll stay bearish.

GBP/USD Daily Outlook

Daily Pivots: (S1) 1.5540; (P) 1.5627; (R1) 1.5713; 

With 1.5542 minor support intact, recovery from 1.5327 might still extend higher. But after all, such recovery is treated as a correction only and hence, we'd expect upside to be limited by 38.2% retracement of 1.6618 to 1.5327 at 1.5820 and bring fall resumption. Below 1.5542 minor support will flip bias back to the downside. Further break of 1.5327 will resume recent decline and target 161.8% projection of 1.6746 to 1.5780 from 1.6618 at 1.5055 next.

In the bigger picture, rise from 1.4229, which is treated as the third leg of consolidation from 1.3503 (2008 low) should be finished at 1.6746 after GBP/USD completed a head and shoulder top reversal pattern (ls: 1.6298, h: 1.6746, rs: 1.6618). Fall from 1.6746 could be the fourth leg of the consolidation pattern from 1.3503 (2008 low) or resuming long term down trend from 2.1161 (2007 high). In either case 1.4229 resistance should be seen. Break of 1.4229 will bolster the down trend resumption case and would possibly push GBP/USD through 1.3503 low. On the upside, break of 1.6618 resistance is needed to invalidate this view. Or we'll now stay cautiously bearish in GBP/USD.

Economic Indicators Update

GMT	Ccy	Events	Actual	Consensus	Previous	Revised
21:45	NZD	Building Permits M/M Aug	12.50%		13.00%	14.30%
23:01	GBP	GfK Consumer Sentiments Sep	-30	-33	-31
23:15	JPY	Nomura/JMMA Manufacturing PMI Sep	49.3		51.9
23:30	JPY	Household Spending Y/Y Aug	-4.10%	-2.80%	-2.10%
23:30	JPY	Jobless Rate Aug	4.30%	4.70%	4.70%
23:30	JPY	Tokyo CPI Core Y/Y Sep	-0.10%	-0.10%	-0.20%
23:30	JPY	National CPI Core Y/Y Aug	0.20%	0.10%	0.10%
23:50	JPY	Industrial Production M/M Aug P	0.80%	1.50%	0.40%
1:00	NZD	NBNZ Business Confidence Sep	30.3		34.4
5:00	JPY	Housing Starts Y/Y Aug	14.00%	4.50%	21.20%
9:00	EUR	Eurozone CPI Estimate Y/Y Sep P		2.50%	2.50%
9:00	EUR	Eurozone Unemployment Rate Aug		10.00%	10.00%
9:30	CHF	KOF Swiss Leading Indicator Sep		1.33	1.61
12:30	CAD	GDP M/M Jul		0.30%	0.20%
12:30	USD	Personal Income Aug		0.10%	0.30%
12:30	USD	Personal Spending Aug		0.20%	0.80%
12:30	USD	PCE Deflator Y/Y Aug		3.00%	2.80%
12:30	USD	PCE Core M/M Aug		0.20%	0.20%
12:30	USD	PCE Core Y/Y Aug		1.70%	1.60%
13:45	USD	Chicago PMI Sep		56.5	56.5
13:55	USD	U. of Michigan Confidence Sep F		57.8	57.8

Daily Report: Risk Aversion Recedes on EU Hopes, Dollar Retreats

Dollar retreats mildly today as risk aversion recedes on hope that European central bankers and officials are putting up a plan to resolve the region's debt problems. Asian equities recover broadly following the 272 pts rebound in DOW overnight. While there is no details yet, it's thought that Eurozone leaders are seriously considering to expand the EFSF fund by borrowing from ECB and leverage while ECB could also announce to restart covered-bond buying next week. Such anticipation will provided support to deeply oversold financial markets in near term but sentiments will remain vulnerable to more negative news out of Europe.

Also, note that the recovery in risk is more technical than fundamental, in particular in precious metals. Gold just few strong support from a key support level of 1577 while silver also rebounded strongly from 26.3 key support. It's totally normal and reasonable for traders to take profits on short positions after the steep dive, and after gold and silver hit the mentioned support levels. Current rebound doesn't warrant a change in overall bearish trend. As mentioned in our weekly report, major stock indices are still holding above August low. We don't take that as sign of resilience, but rather as a sign that the down trend isn't finished but stocks are just still carrying on the consolidations. More risk selloff is still anticipated at a latter stage.

Spain's bond auction will be a focus today which the country is planning to EUR 2.5b and EUR 3.5b of three- and six-months bills today. Meanwhile, Italy will sell as much as EUR 14.5b of government debts later in the week. On the data front, Japan corporate service price index dropped -0.4% yoy in August. Swiss UBS consumption indicator dropped to 0.79 in August. German GFK consumer sentiment was unchanged at 5.2 in October. Eurozone M3, UK CBI reported sales US S&P case shiller house price and consumer confidence will be released later today.

Dollar index faced some resistance from 38.2% retracement of 88.70 to 72.69 at 78.80 and retreats. Some consolidations would be seen below 78.86 temporary top is near term. But we'd expect downside to be contained above 76.06 support and bring another rise. There is no change in the view that whole decline from 88.70 has finished at 72.69 already. And current rise from 72.69 is expected to continue further through 80 psychological level to 61.8% retracement at 82.58 and above in medium term. 

AUD/USD Daily Outlook

Daily Pivots: (S1) 0.9690; (P) 0.9763; (R1) 0.9905; 

AUD/USD's recovery and break of 0.9866 minor resistance suggests that a temporary bottom is in place at 0.9621, just ahead of 100% projection of 1.1079 to 0.9926 from 1.0764 at 0.9611. Intraday bias is turned neutral and some consolidations would be seen. But upside should be limited below 1.0177 support turned resistance and bring another fall. Below 0.9621 will target 0.9404 key support level next. Nevertheless, break of 1.0177 will be the first signal that whole correction fro 1.1079 has completed and will turn focus to 1.0764 resistance for confirmation.

In the bigger picture, the break of long term channel from 2008 low of 0.6008 was relatively brief so far. And AUD/USD manages to recover ahead of mentioned 0.9611 projection level. Thus, the steep fall from 1.1079 could possibly be a correction only, or part of a medium term consolidation. In any case, we'll still prefer to see firm break of 0.9404 key support level to confirm trend reversal, or we'll stay long term bullish in AUD/USD.

Economic Indicators Update

GMT	Ccy	Events	Actual	Consensus	Previous	Revised
23:50	JPY	Corporate Service Price Y/Y Aug	-0.40%	-0.40%	-0.50%	-0.30%
6:00	CHF	UBS Consumption Indicator Aug	0.79		1.29
6:00	EUR	German GfK Consumer Sentiment Oct	5.2	5.1	5.2
8:00	EUR	Eurozone M3 Y/Y Aug		1.90%	2.00%
10:00	GBP	CBI Reported Sales Sep		-14	-14
13:00	USD	S&P/Case-Shiller Composite-20 Y/Y Jul		-4.40%	-4.50%
14:00	USD	Consumer Confidence Sep		46.5	44.5

 

Daily Report: Dollar Extends Rally as Crash in Metals and Stocks Continue

Dollar extends recent rally and rises broadly as the week starts as risk aversion continues to dominate the markets. Investors' sentiments received no boost from the week's IMF/World Bank annual meeting as policymakers are divided on what to do on tackling the current crisis. PBoC Governor Zhou's comment over the weekend reflected that China is still deeper concerned with inflation and sends China stocks to lowest level since July 2010. Aussie and Kiwi are hardest hit today, by the crash in precious metal markets as well as wider than expected trade deficit from New Zealand.

At the meeting over the weekend, IMF called for world policymakers to 'act now and act together' to resume global economic recovery. The world lender said that 'the global economy has entered a dangerous phase, calling for exceptional vigilance, coordination and readiness to take bold action from members and the IMF alike'. World Bank President Robert Zoellick stated that 'the world is in a danger zone' while UK Chancellor George Osborne European leaders had 6 weeks to end the crisis as credible solutions are required to be ready by the next G20 summit in Cannes on November 4. News reports said that German and French leaders have come to some news plans of resolving the sovereign crisis in the 17-nation region. The measures include recapitalization of European banks, expansion of the EFSF to as much as 2 trillion euro and a partial default of Greek debts. Yet, the measures were not verified.

PBoC Governor Zhou Xiaochuan said that "high inflation remains the top concern in China" and there is no "immediate" way to control inflation. China is facing challenges from "relatively fast rises in consumer prices and relatively large amount of capital inflows in the short term". Zhou noted that is "no need for a fundamental change in the monetary or fiscal policies", suggesting China will continue to tighten to curb inflation. Regarding European debt crisis, Zhou noted that he's see if " euro-zone countries can implement their July 21 decision" before determining how China can further help.

The crash in commodity markets since last week is having much pressure on commodity currencies, in particular Aussie. Gold is diving another -5% today and is now trading at around 1550 level, way off the historical high made just weeks ago above 1900. Silver is even weaker as it's losing over -11% today so far. There is no help to Kiwi after reporting wider than expected trade deficit of NZD -641m in August. RBNZ will definitely refrain from further removing policy accommodation in near term while there are already some speculations that RBA would even cut rates within the next six months.

EUR/JPY Daily Outlook

Daily Pivots: (S1) 102.47; (P) 103.09; (R1) 103.95; 

EUR/JPY's fall resumes after brief consolidations and dips to as low as 101.93 so far. Intraday bias is back on the downside for 100 psychological level first and then next near term target at 100% projection of 111.93 to 103.88 from 106.98 at 98.93. On the upside, above 103.75 minor resistance will turn bias neutral again and bring consolidations. But recovery should be limited by 106.98 resistance and bring fall resumption.

In the bigger picture, whole down trend from 2008 high of 169.96 is still in progress and is building up downside momentum again. Sustained trading below 100 psychological level should pave the way to 100% projection of 139.21 to 105.42 from 123.31 at 89.52, which is close to 88.96 all time low. On the upside, break of 123.31 resistance is needed to confirm trend reversal or we'll stay bearish.

EUR/USD Daily Outlook

Daily Pivots: (S1) 1.3422; (P) 1.3494 (R1) 1.3570; 

EUR/USD's fall resumes after brief consolidations and dips to 1.3362 so far today. Intraday bias is back on the downside for 61.8% projection of 1.4548 to 1.3498 from 1.3936 at 1.3287 and then 161.8% projection of 1.4939 to 1.3969 from 1.4548 at 1.2979, which is close to 1.3 psychological level. On the upside, above 1.3566 minor resistance will turn bias neutral and bring consolidations. But recovery should be limited below 1.3936 resistance and bring fall resumption.

In the bigger picture, current development indicates that medium term rise from 1.1875 has completed with three waves up to 1.4939 already. That also suggests that it's merely part of the consolidation pattern that started back in 2008 at 1.6039. Further decline would now be seen to 1.2873 support first and break will target 1.1875 and below. On the upside, above 1.4548, resistance is needed to confirm completion of the fall from 1.4939 or we'll stay bearish in EUR/USD.

GBP/USD Daily Outlook

Daily Pivots: (S1) 1.5349; (P) 1.5420; (R1) 1.5513;

Intraday bias in GBP/USD remains neutral for the moment and some more consolidations would be seen above 1.5327 temporary low. Nevertheless recovery is expected to be limited below 1.5868 resistance and bring fall resumption. Break of 1.5327 will target 161.8% projection of 1.6746 to 1.5780 from 1.6618 at 1.5055 next.

In the bigger picture, rise from 1.4229, which is treated as the third leg of consolidation from 1.3503 (2008 low) should be finished at 1.6746 after GBP/USD completed a head and shoulder top reversal pattern (ls: 1.6298, h: 1.6746, rs: 1.6618). Fall from 1.6746 could be the fourth leg of the consolidation pattern from 1.3503 (2008 low) or resuming long term down trend from 2.1161 (2007 high). In either case 1.4229 resistance should be seen. Break of 1.4229 will bolster the down trend resumption case and would possibly push GBP/USD through 1.3503 low. On the upside, break of 1.6618 resistance is needed to invalidate this view. Or we'll now stay cautiously bearish in GBP/USD.

Economic Indicators Update

GMT	Ccy	Events	Actual	Consensus	Previous	Revised
21:45	NZD	Trade Balance (NZD) Aug	-641M	-321M	129M	111M
8:00	EUR	German IFO - Business Climate Sep		106.5	108.7
8:00	EUR	German IFO - Current Assessment Sep		115.5	118.1
8:00	EUR	German IFO - Expectations Sep		97.4	100.1
14:00	USD	New Home Sales Aug		295K	298K