8th December 2008

MONDAY 8^TH DECEMBER 2008

Ranges

NZD/USD .5207/.5398

AUD/USD .6297-.6526

NZD/AUD .8200/.8335

Last week

Well lots of interest rate cuts last week, which were pretty much as expected. It seems that the world has now moved to expansionary monarty policy, I disagree. Here at home we might be neutral, if were lucky, across the ditch the same might be said but not by as much. Gone are the days of selling currencies after a rate cut, now we see the opposite. With the world looking at proactive reserve banks encouraging growth, currencies jump after an easing.

Probably the most confusing event of last week happened at 2.30am Saturday. The non farm payrolls data was released in the States and it was the worst result since 1974, and the revisions of previous months was also lower. Of course, you would expect to see the Dollar get murdered and the Dow to be absolutely smashed,but no, of course the opposite happened. The Dow rallied and risk trades were entered into…….. Nice to be square going into it.

What we did

Traded the NZD/AUD nicely

NZD ranged traded.

This week

With lack of liquidty in the market we are keeping our positions very small for obvious reasons. We think we will see much of the same this week, with not a lot of data out until Thursday to move the currencies around, apart from ofcourse the Dow.

The currencies will still be following the equities around this week, but as Christmas approaches we should see things remain in the recent wider ranges.

Aussie,kiwi and US datya out on Thursday till the end of the week which will be watched but not really punted on, after last weeks payrolls data hard to see things moving on data that’s not credit issue based.

What we will do

Continue to sell NZD against the AUD on rallies

Trade Kiwi and other currencies in the wider ranges of late

Month Ahead – December 2008

MONDAY 8^th December
AUS
ANZ JOB ADVERTISEMENTS, NOV

TUESDAY 9^th December
AUS
RBA GOVERNOR GLENN STEVENSSPEAKS BEFORE THE AUSTRALIAN BUSINESS ECONOMISTS ANNUAL DINNER, SYDNEY (0900)
NAB MONTHLY BUSINESS SURVEY,
US
PENDING HOME SALES, OCT (1500)

WEDNESDAY 10^th December
AUS
CONSUMER SENTIMENT, DEC (0030)
HOUSING FINANCE, OCT (0030)
NZ
TERMS OF TRADE INDEX, SEP QTR
REINZ HOUSE SALES, NOV (10TH –15TH)

THURSDAY 11^th December
AUS
EMPLOYMENT, NOV (0030)
UNEMPLOYMENT RATE, NOV (0030)
PARTICIPATION RATE, NOV (0030)
US
TRADE BALANCE, OCT (1330)
IMPORT PRICE INDEX, NOV (1330)
EXPORT PRICE INDEX, NOV (1330)
NZ
FOOD PRICES, NOV (2145, WED)