EUR Consolidates Before TLTRO2, AUD Skeptical Post-Jobs Market Brief As expected, the RBNZ maintained its official CASH rate unchanged at 3.50% and postponed the timing of next rate hike from the first to the second half of 2015. More hawkish-than-expected rhetoric pushed NZD/USD shortly to 0.7871. Yet Governor Wheeler reiterated that the Kiwi remains unsustainable high and should significantly depreciate. The MACD will step in bullish consolidation zone for a daily close above 0.7858 and SIGNALdeeper upside correction. Light option bids trail above 0.7850 for todays expiry. In Australia, AUD/USD rallied to 0.8376 amid Australian economy added 42700 jobs in November. However, 40.8K of these jobs have been part-time verse 1.8K in full time only. The unemployment advanced from 6.2% to 6.3%. Unconvinced, AUD/USD fell back through the session. The bias remains negative, upside attempts should see limited follow through. Solid resistance is eyed pre 0.8541 (former low). AUD/NZD dips to 1.0624, forming a triple bottom (Jul 10th, December 10 & 11th). A break below should open the way to 1.0493/1.0536 (year low / March low). EUR/USD consolidates before the allotment of the TLTRO2 due at 10:15 GMT. The first round of the targeted LTRO program in September had greatly disappointed with only 82.60 billion euros lent to 255 banks. While the maximum amount the ECB is ready to lend stands at a distant 400 billion euros, we believe that the outcome in the TLTRO2 may be nothing close to that objective. The consensus for December take-up has fallen below the recent 170 billion euros expected. Soft outcome should increase QE expectations and push EUR/USD back to its bear MARKET. We remain seller on rallies, unless a surprise take-up above 200 billion euros which would lead to a revision. The Swiss National Bank gives policy verdict today and is expected to maintain the status quo. Given the aggressive ECB expansion, the EUR/CHFs 1.20 floor is still at risk, yet not immediately. Depending on the ECB, the SNB may have to introduce negative interest rates on sight DEPOSITS in the near future. However, we expect the SNB to be reactive to ECB actions rather than active. There is no need to pull out the big arm, given that the maneuver margin is very tight and the ECB is about to proceed with a full-blown QE on next quarter. The WTI contracts took another dive yesterday to $60.43 on bets that Saudi Arabia will not easily cut output to defend the market share. USD/CAD advanced to 1.1502 (1 pip higher than previous session). Option bids wait at 1.15+. Else, the Russian Central BANK also meets today and is expected to increase its key rate by 50 basis points to 10%. Aug 2016-23 SPREAD flattened, USD/RUB tests 55-offers. Satisfactory rate action should trigger a relief rally, therefore generate interesting entry opportunities into RUB short positions, as we do not expect sustainable recovery in RUB moving toward free-float FX in 2015. Today, the ECB publishes its Monthly Report. TRADERS watch German, French and Swedish November CPI m/m & y/y, Spanish October House Transactions y/y, Swedish November Unemployment Rate, Norges Bank rate decision, Italian October Industrial Production m/m & y/y, Canadian 3Q Capacity Utilization Rate, Canadian October New Housing Price Index y/y, US November Retail Sales m/m and Import Price Index m/m & y/y, US December 6th Initial Jobless & November 29th Continuing Claims, US October Business Inventories and US 3Q Household Change in Net Worth.
Posted on: Thu, 11 Dec 2014 13:36:23 +0000
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