Intraday Market Thoughts

USD Bid Ahead of Orders & Home Sales

by Patrik Urban
Jan 28, 2013 12:45

Japanese jawboning; commodity dollars weakened; Italian auction; gold lower. Focus turns to durable goods orders and pending home sales. The latest Premium Insights issued on Thursday have 5 trades hit all targets, 5 unfilled, 4 stopped out and 4 in progress.

The common currency trades slightly weaker around 1.3435 despite Italian consumer confidence that fell in January to 84.6 from prior 85.7 which is the worst level since the series started in 1996. EURGBP pushed to 0.8557.

JPY pairs pushed higher in Asia but gave up their gains and trade slightly weaker. Jawboning from Japanese officials continues from the ex economy minister Takenaka who said that the JPY has room to fall towards USDJPY 95. Takenaka is speculated to be a candidate for the new BOJ governor. USDJPY rose to 91.26 and currently trades around 90.70.

Commodity dollars are broadly weaker against the greenback in the ongoing session. AUDUSD fell to 1.0384, NZDUSD trades around 0.8285 and USDCAD rose to 1.0100.

Italy sold 2014 and 2018 bonds totaling EUR 5.5 bln vs. EUR 5-6.75 bln target. Both average yields declined but both bid to covers fell as well. Eurozone sovereign bill issuance is estimated around EUR 19 bln this week, up from last week's EUR 15.7 bln. Bond issuance is seen reaching EUR 15.25 bln vs. EUR 13.01 bln last week, MNI reports.

Spot gold is slightly weaker trading around 1655 ahead of a key short term support zone around 1640. The market is focused on the FOMC meeting on Wednesday and jobs figures on Friday.

The US session begins at 8:30 am ET with durable goods orders that are expected to increase 1.8% in December from prior 0.8%. However, core orders are seen rising only 0.8% from previous 1.6%. Pending home sales are due at 10:00 am and they are anticipated to increase 0.5% in December from November's 1.7%.

Act Exp Prev GMT
Pending Home Sales (DEC) (m/m)
0.3% 1.7% Jan 28 15:00
Pending Home Sales (DEC) (y/y)
8.9% Jan 28 15:00
Durable Goods Orders (DEC)
1.8% 0.8% Jan 28 13:30
Durable Goods Orders ex Transportation (DEC)
0.7% 1.6% Jan 28 13:30
Consumer Confidence (JAN)
84.6 86.0 85.7 Jan 28 9:00

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