== $ == Banks Orders Book == $ ==

[Abo Abdullah]

On The Calendar Today: New Zealand Interest Rates

The kiwi is a resilient bird. Despite the efforts of Wheeler to talk it down, it’s a mid-performer this year and has gained 8.6% against neighbouring AUD.

No doubt the comparatively sky-high 2.50% Official Cash Rate is part of the reason for the resilience (just writing that makes me pine for the days of the 8.25% OCR, now THAT was a carry trade). There is zero chance of a move priced into markets today. The decision is at 2100 GMT.

[Abo Abdullah]

Reserve Bank of New Zealand interest rate decision due at 2100GMT

•The RBNZ is expected to leave the Official Cash Rate (OCR) unchanged
•Its currently at 2.5%
•It will be interesting to note the RBNZ’s comment son inflation, the surging house prices, and anything they have to say about the level of the NZD
•NZD is currently 0.7932/37

[Abo Abdullah]

Train derails in Spain – reports of 20 dead

Witnesses report hearing an explosion then saw the derailed train.
Just watching out to see if this is an accident or a deliberate act. Not getting any further reports as yet.

[Abo Abdullah]

Reserve Bank of New Zealand leaves rates unchanged

[Abo Abdullah]

Reserve Bank of New Zealand Wheeler: Says NZ dollar remains high

•Says policy to depend on housing market, construction sector
•Inflation has been low but expected to trend upward toward mid-point of target
•NZd is high and a headwind
•Global outlook remains mixed
•Growth in NZ economy picking up, but uneven

[Abo Abdullah]

Market Briefings

•Aggressive leveraged players in the US sold AUD/USD to push it into its low stops
•Various leveraged accounts kept AUD/USD well-offered through most of the session
•EUR/AUD bought by leveraged funds, further weighing down on AUD
•A rumor of a ratings agency downgrading Germany caused EUR to weaken, then when the rumor was denied by the agency, EUR rallied
•Good demand for USD from US levearged funds. This was sparked by the steady rise in US 10yr yields
•Macro accounts sold USD/CAD as it neared its lows
•USD stayed strong as it was supported by 10yr yields rising along with the offhand support of AUD/USD being aggressively sold to hunt stops
•AUD outlook remains negative, while NZD out look remains generally positive
•EUR is mixed in sentiment, though has had an upside bias recently
•JPY sentiment is still negative, though it does catch its breaks here and there

[Abo Abdullah]

BofA Merrill - US 10Y Yields Hold Key To USD Index & GBP/USD: Levels & Targets

While US 10yr yields have briefly pushed higher yesterday, more needs to be seen before we can say with confidence that the bear trend has resumed, says Bank of America Merrill Lynch.

"Indeed, against 2.562%, we risk a deeper probe of 2.463%/2.372%resistance before greater basing and resumption of the larger bear trend (we continue to target 2.857%2.951%)," BofA projects.

Until this move higher in US yields take place, "Dollar bulls need to remain PATIENT", BofA advises.

"Yes, the US Dollar Index may have completed its downside correction at the 82.09/82.12 support zone, but until a break of 82.65 (intra-day trendline support), preferably 83.03, we prefer to take a wait-and-see attitude," BofA clarifies.

Same holds for Cable, where BofA sees gains should be limited to 1.5393/1.5438, worst case the 200d (now 1.5580).

"Back below 1.5269, trendline support is the 1st sign that the bear trend has resumed, with a break of 1.5158 confirming a resumption of the larger bear trend," BofA adds.

[Abo Abdullah]

Japan data due today at 2350GMT

Its Thursday so that must mean its International Transactions in Securities day, from Japan’s Ministry of Finance.

At 2350GMT we get:
•Japan buying foreign bonds: (prior week: Y 1105.7bn)
•Japan Buying Foreign Stocks: (prior week: Y-88.2B)
•Foreign Buying Japan Bond: (prior week: Y 0.8B)
•Foreign Buying Japan Stocks: (prior week: Y 398.2B)

Once again, the focus will be on the “Japan buying foreign bonds” figure to get an indication (if any) of the extent of asset managers sending yen to work in offshore markets and thus weighing on the yen

Also up at 2350GMT is the June Corporate Services Price Index, which is seen as a leading indicator of the CPI:
•expected is +0.6%, prior was +0.3%

[Abo Abdullah]

Nomura – AUD/USD "Path Of Least Regret Points To August RBA Cut"

The latest inflation data out of Australia this week showed that CPI inflation in Q2 increased by 0.4% q-o-q, lower than expected, bringing the headline inflation rate to 2.4% y-o-y from 2.5% in Q1. The Reserve Bank of Australia’s (RBA) preferred trimmed mean measure also rose 0.5% q-o-q, in line with expectations, leaving the year-on-year rate at 2.2% from a revised 2.3%.

The recent sharp increase in petrol prices has yet to be captured by the CPI, as this mostly happened in June and July. However, we believe that the RBA will likely look through the impact of a weaker AUD on petrol prices and focus of any second-round effects coming from higher energy costs.

Ultimately, given the increase in the unemployment rate and continued weakness of the economy, we believe that the RBA will cut its policy rate by 25bp rate cut at the August meeting."

[Abo Abdullah]

Commerzbank - GBP/USD Charted A TD Perfected Set-Up; Go Short For 1.5100

GBP/USD has charted a TD (Tom DeMark's) perfected set up at the 1.5393 61.8% retracement, notes Commerzbank.

"This warns of the increased likelihood of failure here, we also note the 13 count on the 240 minute chart.. Attention reverts to the 1.5273 accelerated uptrend – only a close below here will alleviate upside pressure and avert further gains to 1.5551 the 78.6% retracement," CB projects.

"Current strength is still indicated to still be corrective only but what is less clear is how far this will now extend. We will assume that the market remain bid above the 1.5273 accelerated uptrend and only below here does upside pressure alleviate for a slide back to the 1.4854/32 support zone," CB adds outlining its current bias on the pair.

In line with this view, CB advises clients to attempt tiny shorts at market and to add to this short on a bounce into 1.5390 with a stop at 1.5435, and a target at 1.5100.

[Abo Abdullah]

EU pullbacks from May 1 HIGH

Strong resistance seen during April and May from 1.3200 -1.3250
Initial thrust from 1.275 low saw 1.32 tested before pullback began
Pullback held above 50 / 200 day MAs before a retest of 1.3250
Initial pullback seen on Wednesday likely has further to go
Fresh test of 50 / 200 day MAs at 1.308 likely - holding below 1.30 v. bearish

[Abo Abdullah]

Asia Market Report

EUR/USD
•Offers at 1.3250 in good size
•Buy stops above also have grown large
•Bids at 1.3170 through 1.3150
•Sell stops below 1.3150

NZD/USD
•Offers from .8000 into .8010
•Buy stops in good size above those offers
•Bids at .7900
•Sell stops below the big figure

AUD/USD
•Offers at .9170 andin good size at .9240
•Buy stops above
•Bids at .9130 and .9100
•Sell stops below both bid levels

USD/JPY
•Asian exporter offers ahead of 100.50
•Buy stops large above that mid figure
•Bids in front of 99.30, more at 99.00
•Sell stops under 99.10

KEY NEWS
•Japanese CSPI (YoY) expected 0.7% (23:50 GMT)

[Abo Abdullah]

EUR/USD

[Abo Abdullah]

*

[Abo Abdullah]

EU Bears getting FRUSTRATED on data & cloud


Overnight dip into the cloud rebuffed as mkt ignores widening 2 yr yield spread
Mkt may be focused on 10yr spread as DE rate rise outstrips US yield lift
Soft US claims & durable ex-trans dent the USD & has EUR/USD at session highs
Macros demand in EUR/GBP aids lift as well, Asian offers cap for now
Some light stops above recent high but talk of large corp offers into 1.3300
If corp int cleared June high retest likely Chart: http://link.reuters.com/qaq89t