New Zealand Business Confidence Surges As Trade Deficit Narrows

Daily Forex Fundamentals | Written by ecPulse.com | Apr 29 09 07:05 GMT |

Another bright day for the Pacific Rim with not many fundamentals from the region as the main focus in markets and across the globe remain the Swine Flu where it has recently claimed more than 100 victims in New York. However today, our main focus will be on New Zealand as business confidence surged the most since 1993 whereas the annual trade deficit narrowed. Kicking off with confidence, the biggest gain witnessed in 16 years in April was due to the aggressive round of rate cuts to help salvage the economy as it seems now businesses are finding hope in a possible recovery which may recover previous losses and encourage more spending and hence employment to rise to normal levels. Companies are now becoming more pessimistic about the outlook of the economy over the upcoming year as 3.8 percent of all companies surveyed expected a drop in sales and profits over the next 12 months leaving 96.2 percent with an optimistic vision. This was compared to March's 21.2 percent who felt the economy was to deteriorate further. As the survey is conducted by the Australia and New Zealand national Bank Ltd., it is important to note that the bank said profits during the first half slumped 28 percent on bad debts which had doubled the amount. Net income fell to A$1.42 billion from a previous A$1.96 billion a year earlier during the six months ending March 31. The bank's weakening financing resulted in credit impairment to surge 98 percent during the period to reach A$1.44 billion. Due to that, the bank was forced to lower its dividends for the first time since the last recession that has hit Australia 18 years ago taking total dividends to 46 cents per share. After the confidence data, the bank also revised growth rates higher to show that the economy is forecasted to contract 2 percent over the year compared to the previous forecast in March of a 3 percent contraction. Regarding the trade balance, New Zealand's trade deficit narrowed in March to reach NZ$4.8 billion from NZ$5.16 billion as commodity prices eased and as exports were supported by aircraft sales. By the end of 2008, the trade deficit was 8.9 percent of GDP yet ANZ currently forecasts the gap to narrow to 5.8 percent by the end of 2009. Exports inclined more than imports this month which helped narrow the gap with overseas shipments surging 18 percent to NZ$4.04 billion whereas imports were up 6.9 percent to NZ$3.72 percent. Elsewhere in the region, South Korea also released its current account balance indicating that the surplus widened during March to reach $6.65 billion from a previous $3.56 billion as imports slumped further and the collapse in the export sector had slowed. The Bank of Korea said that this has helped stabilize the national currency as the surplus widened alongside cash flowing into their equity market. Although the nation was impacted by the global recession, its forecast for the surplus shows that it may witness an $18 billion surplus by the end of 2009 as they believe that the contraction in the economy is gradually slowing. Overseas shipments were up 10.5 percent in March while industrial output rose 6.8 percent. The outlook for the economy is shaping up to be quite positive as recovery may be witnessed soon. The Kospi Index rose 2.9 percent during the session snapping a three day loss as it trailed the MSCI Asia Pacific excluding Japan index which advanced 1.9 percent to reach 267.75 points as of 2:20 p.m. in Hong Kong after signs that earnings may be better than expected and the ease in commodity prices. The Taiex index in Taiwan was up 0.3 percent while Hang Seng Index of Hong Kong advanced 1.8 percent. The Nikkei Index was out today on holiday. Despite the Japanese markets are out for holiday, the BoJ rate decision is on queue where expectations are for steady rates at 0.10 percent. Let's not forget that the Fed's precede them today as the FOMC rate decision is to be released later toady with market expectations to witness a cut to 0.13 percent taking the benchmark close to Japan. With the ongoing weakness in the Japanese economy, the BoJ and the government are hoping that the record stimulus plan by Prime Minister Taro Aso is to help the economy limit the levels of deterioration as it is to shave of 1.9 percentage points to take forecasts to a 3.3 percent contraction Ecpulse disclaimer: The content of ecPulse.com and any page in the website contain information for investors/traders and is not a recommendation to buy or sell currencies, stocks, gold, silver & energies, nor an offer to buy or sell currencies, stocks, gold, silver & energies. The information provided reflects the writers' opinions that deemed reliable but is not guaranteed as to accuracy or completeness. ecPulse is not liable for any losses or damages, monetary or otherwise that result. I recommend that anyone trades currencies, stocks, gold, silver & energies should do so with caution and consult with a broker before doing so. Prior performance may not be indicative of future performance. Currencies, stocks gold, silver &energies presented should be considered speculative with a high degree of volatility and risk

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Daily Financial Market Outlook

Daily Forex Fundamentals | Written by Lloyds TSB | Apr 29 09 06:57 GMT |

Overview & economic commentary US GDP and the FOMC meeting dominate proceedings today. It seems the Fed can do little more to loosen monetary policy for now, with interest rates at 0-0.25% and a scheme to buy up to $300bn of long-term treasuries and expand agency debt and MBS already under way. Instead, it is likely that the Fed will maintain a wait and see approach, though markets will be looking out for any change in the tone relating to the pace of the downturn and the risk of deflation. Advance Q1 GDP is forecast to show annualised 5% contraction, slightly better than the 6.3% fall in Q4. Weak investment (residential and non-residential) and a reduction in inventories are expected to have weighed on overall growth, partly offset by a narrower trade deficit, especially in price-adjusted terms which goes into the GDP estimate, and an improvement in consumer spending. Overall, the risk could be a smaller decline than forecast. In Europe, EU-16 money supply and the European Commission's monthly economic sentiment indicators are due. Annual M3 money supply growth is forecast to slow further, with credit growth to households and corporates also easing. However, there may be an improvement in the euro zone industrial confidence indicator, in line with recent PMI and German IFO surveys. Overall, though, euro zone business confidence remains at very weak levels consistent with further policy easing by the ECB next week. ECB member Stark speaks in the afternoon and the US offers $26bn of 7yr notes, the remaining part of its $101bn of supply this week. Details of the quarterly treasury refunding should also be announced, and there is talk of a new 50y issue. The RBNZ tonight is expected to cut interest rates by 50bps to 2.5%. Currency commentary The steepening in the US 2y/10y yield curve to 206bp, the issuance of 7y notes and details of the US quarterly refunding later todayare likely to keep bonds under pressure, with rumours of a new 50y issue adding impetus to the under performance of the long end. US Q1 GDP and a less pessimistic assessment by the Fed on the economy in the FOMC statement tonight could thwart further buying interest in fixed income paper, but no sea change in policy expectations should materialise as long as unemployment continues to head upwards and housing data remains extremely weak. Speculation about what US banks and how much extra capital may need to be raised should cap upside in stocks and may help to underpin the safe haven bid. The dollar is a touch softer this morning, led by a return of some degree of risk appetite in Asia where equity indices are up around 2% on average. €/$ is bid above 1.32 and £/$ cleared 1.47. The rand enjoyed a remarkable session overnight, firming to 8.4043 v the usd. £/rand hit a low of 12.3583 Major data and events today EU-16 money supply, M3 (sa) (09:00) Feb Y-O-Y +5.9% Mar (f'cast) Y-O-Y +6.0% Median +5.7% Range +4.1%:+6.0% EU-16 consumer confidence (10:00) Mar -34 Apr (f'cast) -34 Median -33 Range -35:-31 EU-16 industrial confidence (10:00) Mar -38 Apr (f'cast) -37 Median -36 Range -38:-30 US GDP (sa, annualised) (13:30) Q4 -6.3% Q1 (f'cast) -5.0% Median -5.0% Range -8.0%:-3.3% US GDP deflator (sa, annual) (13:30) Q4 +0.5% Q1 (f'cast) +1.5% Median +1.8% Range -0.4%:+3.1% US FOMC interest rate decision (19:15) Current: 0-0.25% Forecast: 0-0.25% US weekly oil inventories are published (15:30) ECB member Stark speaks (16:30) US Treasury auctions $26bn 7yr notes (18:00) Chart of the day: The US economy expected to remain mired in recession in Q1 2009, but is there is a risk of smaller than forecast decline? Lloyds TSB Bank http://www.lloydstsbfinancialmarkets.com Disclaimer: Any documentation, reports, correspondence or other material or information in whatever form be it electronic, textual or otherwise is based on sources believed to be reliable, however neither the Bank nor its directors, officers or employees warrant accuracy, completeness or otherwise, or accept responsibility for any error, omission or other inaccuracy, or for any consequences arising from any reliance upon such information. The facts and data contained are not, and should under no circumstances be treated as an offer or solicitation to offer, to buy or sell any product, nor are they intended to be a substitute for commercial judgement or professional or legal advice, and you should not act in reliance upon any of the facts and data contained, without first obtaining professional advice relevant to your circumstances. Expressions of opinion may be subject to change without notice. Although warrants and/or derivative instruments can be utilised for the management of investment risk, some of these products are unsuitable for many investors. The facts and data contained are therefore not intended for the use of private customers (as defined by the FSA Handbook) of Lloyds TSB Bank plc. Lloyds TSB Bank plc is authorised and regulated by the Financial Services Authority and is a signatory to the Banking Codes, and represents only the Scottish Widows and Lloyds TSB Marketing Group for life assurance, pension and investment business.

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Technical Analysis for Crosses

Daily Forex Technicals | Written by ecPulse.com | Apr 29 09 06:39 GMT |

GBP/JPY Affected by the obvious hammer candlestick which we mentioned in our mid-day report yesterday-check it here- The British pound versus Japanese yen went upward above 61.8% Fibonacci level as a technical result for the (D-Reversal) zone of the bullish bat harmonic pattern placing a temporary high at 142.75 zones whereas our yesterday's target has been reached. Now we expect a reactionary wave on the intraday basis before resuming the major upside direction. So that based on the bearish hourly structure accompanied by RSI -currently valued at 70.00- as appearing on the secondary image we will keep our outlook to the downside on the intraday basis. Trading range for today is among key support at 138.15 and key resistance at 147.30. The general trend is to the downside as far as 156.20.remains intact with target at 116.00. Support: 142.00, 141.50, 140.50, 139.65, 139.25 Resistance: 143.00, 143.85, 144.60, 145.00, 145.50 Recommendation: According to our analysis, sell the pair at 142.50 with targets at 140.25 and stop loss at 144.45. EUR/JPY The Elliott sequence is still in progress as the Euro versus the Japanese yen inclined reaching our target as a normal technical effect for the heavy negative divergence-Check it here- forming the possible first leg of the anticipated bigger (B) of the whole anticipated Zigzag (5-3-5) correction that touched the upper line of the minor descending channel . Hence we expect an internal second downward wave correction on the intraday basis support by the overbought signal appearing on the RSI. Trading range for today is among key support at 123.85 and key resistance now at 131.50. The general trend is to the downside as far as 141.44 remains intact with targets at 100.00 followed by 88.97 levels. Support: 127.30, 126.50, 126.00, 125.35, 124.65 Resistance: 128.30, 129.00, 129.75, 130.50, 131.05 Recommendation: According to our analysis, sell the pair at 127.90 with targets at 125.60 and stop loss at 129.75. EUR/GBP After the sharp decline occurred yesterday towards 0.8880 zones whereas it was supported again and was followed by a bullish engulfing candlestick structure revives the potentiality of breaching 61.8% Fibonacci Arc as the royal pair is supported above Ichimoku cloud and above the previous consolidation areas. Hence we see further strength on the intraday basis. Carefully note that a break of 0.8840 can change this bullish prediction Trading range is among the key support 0.8760 and key resistance now at 0.9130. The general trend is to the upside as far as 0.8020 area remains intact with targets at 1.0000 followed by 1.0400 levels. Support: 0.8930, 0.8900, 0.8855, 0.8815, 0.8765 Resistance: 0.9000, 0.9030, 0.9070, 0.9130, 0.9180 Recommendation: According to our analysis, buy the pair at 0.8960 with targets at 0.9060 and stop loss at 0.8875. Ecpulse disclaimer: The content of ecPulse.com and any page in the website contain information for investors/traders and is not a recommendation to buy or sell currencies, stocks, gold, silver & energies, nor an offer to buy or sell currencies, stocks, gold, silver & energies. The information provided reflects the writers' opinions that deemed reliable but is not guaranteed as to accuracy or completeness. ecPulse is not liable for any losses or damages, monetary or otherwise that result. I recommend that anyone trades currencies, stocks, gold, silver & energies should do so with caution and consult with a broker before doing so. Prior performance may not be indicative of future performance. Currencies, stocks gold, silver &energies presented should be considered speculative with a high degree of volatility and risk

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Forex Technical Analysis

Daily Forex Technicals | Written by DeltaStock Inc. | Apr 29 09 07:13 GMT |

EUR/USD Current level-1.3196 EUR/USD is in a broad consolidation, after bottoming at 1.2331 (Oct.28,2008). Technical indicators are neutral, and trading is situated between the 50- and 200-Day SMA, currently projected at 1.3035 and 1.3589. With yesterday's spike low to 1.2965, the downtrend from 1.3296 has been reversed and the bias is positive for 1.33+. Intraday support comes at 1.3162 and crucial is 1.3119. On the 4 h chart targets are 1.3391 and 1.3580. Resistance Support intraday intraweek intraday intraweek 1.3212 1.3391 1.2986 1.2576 1.3296 1.3740 1.2889 1.2328 USD/JPY Current level - 96.72 A short-term bottom has been set at 87.12 and a large consolidation is unfolding since. Trading is situated between the 50- and 200-day SMA, currently projected at 94.12 and 99.36. With the recent bottom at 95.64, the pair has entered a larger corrective phase with a minimum target at 97.70 resistance zone. Intraday bias is positive, well supported above 96.61, for 97.70. Resistance Support intraday intraweek intraday intraweek 97.01 102.16 95.64 93.38 97.70 103.55 94.56 89.82 GBP/USD Current level- 1.4707 The pair is in a broad corrective phase, after bottoming at 1.3506. Trading is situated between the 50- and 200-day SMA, currently projected at 1.4422 and 1.5896. As expected, yesterday's minor downtrend ended above 1.4510 and an uptrend emerged, targeting 1.4772-4821 zone. Current upmove is expected to be the last wave of the consolidation pattern above 1.4398, preceding sharp slide towards 1.4112. Important is 1.4510, as this level will be the trigger of the expected sell-off. Resistance Support intraday intraweek intraday intraweek 1.4771 1.5065 1.4504 1.4107 1.4846 1.5727 1.4312 1.30+ DeltaStock Inc. - Online Forex & Securities Broker www.deltastock.com RISK DISCLAIMER: These analyses are for information purposes only. They DO NOT post a BUY or SELL recommendation for any of the financial instruments herein analyzed. The information is obtained from generally accessible data sources. The forecasts made are based on technical analysis. However, Delta Stock’s Analyst Dept. also takes into consideration a number of fundamental and macroeconomic factors, which we believe impact the price moves of the observed instruments. Delta Stock Inc. assumes no responsibility for errors, inaccuracies or omissions in these materials, nor shall it be liable for damages arising out of any person's reliance upon the information on this page. Delta Stock Inc. shall not be liable for any special, indirect, incidental, or consequential damages, including without limitation, losses or unrealized gains that may result. Any information is subject to change without notice.

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Forex and Dow Jones Recommended Levels

Daily Forex Technicals | Written by FXtechtrade | Apr 29 09 07:07 GMT |

EUR/USD Today's support: - 1.3140, 1.3092 and 1.3050(main), where correction is possible. Break would give 1.3004, where correction also may be. Then follows 1.2980. Break of the latter would result in 1.2957. If a strong impulse, we would see 1.2917. Continuation will give 1.2882. Today's resistance: - 1.3230(main). Break would give 1.3262, where a correction is possible. Then goes 1.3297. Break of the latter would result in 1.3316. If a strong impulse, we'd see 1.3343. Continuation will give 1.3364. USD/JPY Today's support: - 96.30(main). Break would bring 96.01, where correction is possible. Then 95.86, where a correction may also happen. Break of the latter will give 95.64. If a strong impulse, we would see 95.40. Continuation would give 95.18. Today's resistance: - 97.26 and 97.43(main), where a correction may happen. Break would bring 97.87, where also a correction may be. Then 98.12. If a strong impulse, we would see 98.44. Continuation will give 98.57. DOW JONES INDEX Today's support: - 7987.50(main), where a delay and correction may happen. Break of the latter will give 7959.37, where correction also can be. Then follows 7922.80. Be there a strong impulse, we would see 7900.20. Continuation will bring 7871.40. Today's resistance: - 8087.90 and 8123.46(main), where a delay and correction may happen. Break would bring 8150.62, where a correction may happen. Then follows 8173.13, where a delay and correction could also be. Be there a strong impulse, we'd see 8195.62. Continuation would bring 8246.30 and 8280.00. FXtechtrade http://www.fxtechtrade.com Disclaimer: Any information presented by Nikolajs Serikovs at this very website should be in no way understood as an offer, promise or guarantee for receiving a profit or avoiding the losses. Stated here levels of support and resistance must not be construed as an investment advice or endorsement for any financial instrument. There exists no guarantee that the market would behave in accordance with the information stated here Prepared in Republic of Latvia for the worldwide distribution.

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US Consumers Lead Rebound

Daily Forex Fundamentals | Written by Easy Forex | Apr 29 09 01:26 GMT |

U.S. Dollar Trading (USD) weakened in New York but only after testing fresh strength in Asia on swine flu fears. Fears the stress tests will require Citibank and Bank of America to raise more capital sent bank shares lower. Helping general sentiment was the large rise in Consumer Confidence to 39.2 vs. 29.6 previously. Crude Oil down $0.60 ending the New York session at $49.42 per barrel. In US share markets, the Nasdaq was down 5 points or -0.33% and the Dow Jones was down 8 points or 0.10%. Looking ahead, Q1 GDP forecast at -4.9% vs. -5.3% previously. Also the FED meet and are expected to remain at 0-0.25% band. The Euro (EUR) was able to rebound sharply once again after testing below 1.3000 in Europe. German CPI was flat 0.0%m/m in April. Comments pouring cold water on QE speculation also help buoy the single currency in New York. Overall the EUR/USD traded with a low of 1.2965 and a high of 1.3165 before closing at 1.3145. Looking ahead, April Eurozone Consumer Confidence is forecast at -33 vs. -34 previously. The Japanese Yen (JPY) used the weak Asian stocks to make fresh gains across the board led by the EUR/JPY. USD/JPY broke below 96 yen but found a lot of support below which as sentiment reversed in the US so did the crosses direction. Overall the USDJPY traded with a low of 95.65 and a high of 96.65 before closing the day around 96.50 in the New York session. The Sterling (GBP) found support below 1.46 before rebounding on better than expected economic data. CBI Distributive trades at +3 vs. -40 the first positive reading since last year. Overall the GBP/USD traded with a low of 1.4577 and a high of 1.4773 before closing the day at 1.4675 in the New York session. The Australian Dollar (AUD) tested 0.700 before rebounding overnight as AUD/JPY buyers emerged from the month lows yesterday. Volatile market moods are making it hard to pick direction of the risk based currency. Overall the AUD/USD traded with a low of 0.6990 and a high of 0.7101 before closing the US session at 0.7070. Looking ahead, RBNZ rate call forecast at 2.5% vs. 3%. Gold (XAU) fell sharply in Asia as the USD strengthened breaking back below $900 as demand fizzled. Overall trading with a low of USD$905 and high of USD$885 before ending the New York session at USD$890 an ounce. Easy Forex http://www.easy-forex.com Easy-Forex makes no recommendations as to the merits of any financial product referred to in this website, emails or its related websites and the information contained does not take into account your personal objectives, financial situation and needs. Therefore you should consider whether these products are appropriate in view of your objectives, financial situation and needs as well as considering the risks associated in dealing with those products

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Forex Exchange Morning Report

Daily Forex Fundamentals | Written by Westpac Institutional Bank | Apr 29 09 01:35 GMT |

News And Views Risk aversion fades slightly ahead of Fed. FX markets unwound a bit of risk aversion overnight, helped by better US data, as traders prepared for Q1 GDP and the Fed. US consumer confidence came in well above expectations helping trades like NZD/JPY and AUD/JPY recover at least some of the lost ground. However, nervousness over the banks remained with both Citi and BoA under pressure. NZD traded down around the 0.5530 level in Sydney only to recover some ground to around 0.5620. The picture was similar for the AUD hit a low of 0.6990 during the Sydney session but never really came close to re-testing that level over night. In NY it hit a high of 0.7102. EUR/USD dipped as low as 1.2964 in the London morning but rallied steeply in NY, with DXY losing safe haven demand in part on the better than expected data. Along with a slight easing in the pace of house price decline in Feb, EUR/USD got a further kick along from consumer confidence, which was well above even the bullish market rumours. EUR/USD pushed to the high 1.30s then again in late NY to 1.3150. Not surprisingly, the yen lost some allure, with USD/JPY bouncing from 96.00 in London to the 96.60 area before easing slightly. US Richmond Fed factory index up from -20 to -9 in April. The Richmond Fed factory index, like NY, Philly and Dallas before it, found less pessimism this month. The headline improvement was significant, and the detail showed a much slower pace of decline in new orders and shipments. However the jobs component remained very weak, as was the case in the other regional surveys. The Richmond Fed's separate services survey slipped from -28 to -29 in April, so diminished industrial sector pessimism does not seem to have spread to the services sector just yet. US consumer confidence up 12.3 pts in April. The Conference Board's consumer confidence index jumped sharply this month, though the gain was almost entirely due to expectations, which often track fairly well with the equity market, which has risen 500 points (Dow) since the March survey. The latest tax cuts may also have helped. The current component of the index rose only slightly, held down by a still very pessimistic view of the labour market. US S&P Case Shiller House Price index fell 2.2% in Feb after falling 2.8% in January. Positive spin: the first monthly decline in eight months not to be steeper than the previous month's decline; negative spin: the fifth consecutive monthly decline of over 2%. The annual pace of decline moderated from -19.0% yr to -18.6% yr, which is the first rise in the annual rate since November 2005; it reflected a 2.6% fall in prices in February last year dropping out of the annual calculation. So as with some of the other US housing data, even prices are falling at a less rapid pace but it would be fanciful to suggest that the US housing market is about to turn - the supply overhang remains a huge impediment to new activity and actual price gains. Further, rising unemployment will continue to dampen the market for some time to come. Japan retail sales fall 1.1% in March, the sixth successive monthly decline. Despite this, the through the year fall in spending moderated from the 5.7% recorded in Feb to -3.9%. The result was well below consensus expectations of a 0.4% decline but in line with Westpac's expectation of a 1% fall. German CPI accelerated slightly to 0.7% yr in April despite a flat monthly result for April, because a 0.2% fall in April 2008 dropped out of the calculation. UK CBI retail survey up from -44 to +3 in April. The first positive reading since March last year, but the CBI explained that the relatively late Easter boosted the outcome substantially. If the CBI is correct then the May survey should be sharply weaker again. Outlook We expect to see further weakening in the NZD into the RBNZ meeting on Thursday. Events Today Date Country Release Last Forecast 29-Apr NZ Mar Merchandise Trade NZDmn 489 450 Apr NBNZ Business Confidence –39.3% – US Q1 GDP Advance % Annualised –6.3% –5.0% FOMC Rate Decision 0.25% 0.25% Eur Mar Money Supply M3 %yr 5.9% 5.70% Apr Retail PMI 44.1 – Apr Business Climate Index –3.58 –3.60 Apr Economic Confidence 64.6 64.3 Apr Consumer Confidence –34 –35 30-Apr NZ RBNZ OCR Review 3.00% 2.50% Mar Building Consents s.a. 11.60% 0.60% Westpac Institutional Bank http://www.wib.westpac.co.nz/ Disclaimer All customers please note that this information has been prepared without taking account of your objectives, financial situation or needs. Because of this you should, before acting on this information, consider its appropriateness, having regard to your objectives, financial situation or needs. Australian customers can obtain Westpac's financial services guide by calling +612 9284 8372, visiting www.westpac.com.au or visiting any Westpac Branch. The information may contain material provided directly by third parties, and while such material is published with permission, Westpac accepts no responsibility for the accuracy or completeness of any such material. Except where contrary to law, Westpac intends by this notice to exclude liability for the information. The information is subject to change without notice and Westpac is under no obligation to update the information or correct any inaccuracy which may become apparent at a later date. Westpac Banking Corporation is regulated for the conduct of investment business in the United Kingdom by the Financial Services Authority. © 2004 Westpac Banking Corporation. Past performance is not a reliable indicator of future performance. The forecasts given in this document are predictive in character. Whilst every effort has been taken to ensure that the assumptions on which the forecasts are based are reasonable, the forecasts may be affected by incorrect assumptions or by known or unknown risks and uncertainties. The ultimate outcomes may differ substantially from these forecasts.

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Foreign Exchange Market Commentary

Daily Forex Technicals | Written by HY Markets | Apr 29 09 03:18 GMT |

EUR/USD closed higher on Tuesday as it consolidated some of Monday's decline. The high-range close sets the stage for a steady to higher opening on Wednesday. Stochastics and the RSI remain bullish signalling that sideways to higher prices are possible near-term. If it extends last week's rally, the reaction high crossing is the next upside target. Closes below last week's low would open the door for a possible test of March's low crossing. USD/JPY closed higher on Tuesday as it extends this month's decline. Profit taking tempered early gains and the low-range close sets the stage for a steady to lower opening on Wednesday. Stochastics and the RSI are neutral to bullish but are overbought hinting that a short-term top might be near. If it extends this month's rally, March's high crossing is the next upside target. Closes below the 20-day moving average crossing would signal that a short-term top has been posted. GBP/USD closed lower on Tuesday due to profit taking as it extends last week's trading range. The mid-range close sets the stage for a steady opening on Wednesday. Stochastics and the RSI are neutral hinting that a short-term low might be in or is near. Closes above the 10-day moving average crossing are needed to confirm that a short-term low has been posted. If it renews the decline off April's high, the reaction low crossing is the next downside target. USD/CHF closed higher on Tuesday as it consolidated some of Monday's decline. The high-range close sets the stage for a steady to higher opening on Wednesday. Stochastics and the RSI remain bullish signalling that sideways to higher prices are possible near-term. If it extends this month's rally, March's high crossing is the next upside target. Closes below the 20-day moving average crossing would signal that a short-term top has been posted. HY Markets http://www.hymarkets.com

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New Zealand Annual Trade Gap Narrows as Exports Rise

By Tracy Withers

April 29 (Bloomberg) -- New Zealand’s annual trade deficit narrowed in March as rising commodity prices and the sale of an aircraft bolstered exports to a record.

The gap narrowed to NZ$4.8 billion ($2.7 billion) in the 12 months ended March 31 from NZ$5.16 billion in the year through February, Statistics New Zealand said in Wellington today. The median estimate in a Bloomberg News survey of 10 analysts was for a NZ$4.89 billion shortfall.

World prices of butter, meat and other commodities rose for the first time in eight months in March, buoying exports that make up 30 percent of the New Zealand economy. The annual deficit may narrow further as a domestic recession curbs demand for imports. Finance Minister Bill English said last week the economy is probably in its sixth quarter of contraction.

“There were some positive signs for agricultural exports,” said Philip Borkin, an economist at ANZ National Bank Ltd. in Wellington. “The economy is definitely rebalancing as imports come under pressure. We think we have seen the peak in the current-account deficit.”

New Zealand’s dollar bought 56.10 U.S. cents at 11:40 a.m. in Wellington from 55.82 cents immediately before the report was released.

The current-account deficit, the broadest measure of trade because it includes investment and tourism, was a record NZ$16.07 billion, or 8.9 percent of gross domestic product in the year ended Dec. 31. ANZ expects the gap will narrow to 5.8 percent of GDP by the end of 2009.

Monthly Gap

Economists monitor the rolling, 12-month trade balance because of volatility in the month-on-month figures, which aren’t seasonally adjusted. In March, there was a trade surplus of NZ$324 million compared with a NZ$43 million deficit a year earlier.

Exports rose 18 percent from a year earlier to NZ$4.04 billion, led by the NZ$128 million sale of an aircraft and gains in beef, lamb and apple prices, the statistics agency said. The kiwifruit export season also began earlier than usual.

Commodity prices rose 1 percent in March from February, according to an index compiled by ANZ National Bank Ltd.

Sales of milk powder, butter and cheese, which make up almost one-fifth of overseas shipments, gained 4.5 percent. Crude oil and aluminum exports declined.

Imports jumped 6.9 percent to NZ$3.72 billion led by electrical machinery, particularly for wind farms, the agency said. Vehicle and fuel imports fell.

Crude oil imports dropped 49 percent from a year earlier. The import and export figures aren’t adjusted for inflation and reflect changing commodity prices as well as actual shipments. Crude oil imports fell by a third to 284,000 tons from a year earlier. Prices declined 20 percent.

Imports recovered from a three-year low in February. Still, first-quarter imports slumped 13 percent from the fourth quarter, the statistics agency said.

To contact the reporter on this story: Tracy Withers in Wellington at twithers@bloomberg.net.

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FX Technical Commentary

Daily Forex Technicals | Written by Easy Forex | Apr 29 09 01:28 GMT |

Euro 1.3130 Initial support at 1.2866 (Apr 22 low) followed by 1.2732 (Mar 12 low). Initial resistance is now located at 1.3274 (April 27 high) at followed by 1.3301 (Apr 24 high) Yen 96.50 Initial support is located at 95.43 (Mar 23 low) followed by 94.15 (Mar 23 low). Initial resistance is now at 97.30 (Apr 27 high) followed by 98.15 (Apr 24 high). Pound 1.4620 Initial support at 1.4398 (Apr 22 low) followed by 1.4241 (Mar 31 low). Initial resistance is now at 1.4817 (Apr 20 high) followed by 1.4942 (Apr 17 high). Australian Dollar 0.7065 Initial support at 0.6954 (Apr 20 low) followed by the 0.6857 (Apr 1 low). Initial resistance is now at 0.7249 (Apr 20 high) followed by 0.7327 (Apr 13 high). Gold 891 Initial support at 878 (Apr 21 low) followed by 864 (Apr 17 low). Initial resistance is now at 933 (Apr 1 high) followed by 945 (Mar 26 high). Currency Sup 2 Sup 1 Spot Res 1 Res 2 EUR/USD 1.2732 1.2886 1.3130 1.3274 1.3301 USD/JPY 94.15 95.43 96.50 97.30 98.15 GBP/USD 1.4240 1.4398 1.4620 1.4817 1.4942 AUD/USD 0.6857 0.6954 0.7065 0.7249 0.7327 XAU/USD 864.00 878.00 891.00 933.00 945.00 Easy Forex http://www.easy-forex.com Easy-Forex makes no recommendations as to the merits of any financial product referred to in this website, emails or its related websites and the information contained does not take into account your personal objectives, financial situation and needs. Therefore you should consider whether these products are appropriate in view of your objectives, financial situation and needs as well as considering the risks associated in dealing with those products

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Economists Split as Malaysia Readies for Interest-Rate Decision

By Stephanie Phang and Michael Munoz

April 29 (Bloomberg) -- Economists are split on whether Malaysia will lower its benchmark interest rate as the central bank balances a collapse in exports and the threat from swine flu against government stimulus measures.

A reduction is expected by 11 of 21 economists surveyed by Bloomberg News, with eight forecasting a quarter-point cut to 1.75 percent. Three expect a half-percentage-point reduction. Ten predict no change. The decision is due at 6 p.m.

Inflation at an 11-month low and the risk that swine flu will prolong the global recession may encourage the central bank to add to 1.5 percentage points of reductions since late November. Prime Minister Najib Razak, who’s lost two of three regional elections this month, has unveiled two stimulus plans and allowed more foreign ownership of banks and services companies to spur growth.

“While stimulus measures have been put in place, the impact has yet to take effect,” said Patricia Oh, an economist at TA Securities Holdings Bhd. in Kuala Lumpur. “With the moderating trend in inflation, there is ample room for monetary easing.”

Swine flu, which has infected people in Mexico, the U.S., the U.K., Canada and Spain, may delay a global recovery, adding pressure for rate cuts, said Alvin Liew, an economist at Standard Chartered Plc in Singapore.

Bank Negara Malaysia Governor Zeti Akhtar Aziz said last month that gross domestic product may have contracted in the first quarter and predicted a revival in the second half on stimulus measures and reduced borrowing costs.

Shrinking Economy

“We strongly suspect that Bank Negara will be surprised by the weakness of GDP growth in the first quarter,” said Robert Prior-Wandesforde, an economist at HSBC Holdings Plc in Singapore who expects a quarter-point cut today. The economy may have contracted by at least 3 percent in the three months through March from a year earlier and more than 5 percent this quarter, he said.

Interest-rate swaps suggest the central bank will refrain from cutting because the economy shows signs of recovery. Zeti said this week that Bank Negara may have “done most of what we need to do” and reiterated that rate cuts had been “frontloaded.”

Three-year swap rates have climbed 0.3 percentage point since touching a decade low on March 4 and one-year swap rates rose to 2 percent on April 27, matching the central bank’s overnight rate.

Smaller declines in exports and industrial production in February “may give Bank Negara greater confidence to pause,” Citigroup Inc.’s Singapore-based economists Kit Wei Zheng and Leon Hiew said in a April 24 note. “The hurdle for further rate cuts appears high.”

Southeast Asia’s third-largest economy grew 0.1 percent in the fourth quarter from a year earlier, the least in seven years, as exports of Intel Corp. computer chips and IOI Corp. palm oil tumbled. Inflation cooled to 3.5 percent in March.

Malaysia Overnight Policy Rate Estimates
========================================================
Observation Period         April     End     End     End
                             29      2Q      3Q    2009
========================================================
Median                     1.75%   1.50%   1.50%   1.50%
% forecasts at Median      38.1%    8.0%    7.0%    7.0%
High                       2.00%   2.00%   2.00%   2.00%
Low                        1.50%   1.25%   1.25%   1.25%
Number of Estimates           21      12      12      12
========================================================
Action Economics           2.00%   2.00%   2.00%   2.00%
AmResearch                 2.00%   1.50%   1.50%   1.50%
Bank Islam Malaysia        1.75%   1.50%   1.50%   1.50%
Barclays Capital           2.00%      --      --      --
Capital Economics Ltd.     1.75%      --      --      --
CIMB Investment Bank       2.00%      --      --      --
Credit Suisse              1.75%      --      --      --
DBS Group                  1.50%   1.50%   1.50%   1.50%
HSBC                       1.75%   1.25%   1.25%   1.25%
IDEAglobal                 2.00%      --      --      --
ING Groep NV               2.00%      --      --      --
JP Morgan Chase            2.00%   2.00%   2.00%   2.00%
Macquarie Securities       2.00%      --      --      --
Maybank Investment Bank    2.00%   2.00%   2.00%   2.00%
Moody’s Economy.com        1.75%   1.50%   1.50%   1.50%
Nomura Singapore           1.75%      --      --      --
OCBC Bank                  1.75%   1.50%   1.50%   1.50%
Reuters IFR                2.00%      --      --      --
Standard Chartered         1.50%   1.50%   1.50%   1.50%
TA Enterprise Berhad       1.50%   1.50%   1.25%   1.25%
Westpac Banking            1.75%   1.50%   1.50%   1.50%
========================================================

To contact the reporter on this story: Stephanie Phang in Singapore at sphang@bloomberg.net

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South Korean Current Account Rises, N.Z. Exports Gain

By Tracy Withers and Seonjin Cha

April 29 (Bloomberg) -- South Korea’s current-account surplus widened to a record and New Zealand overseas shipments rose for a second month in March, indicating the Asia-Pacific region’s export slump may be abating.

The current-account surplus, South Korea’s broadest measure of trade, swelled to $6.65 billion last month, almost doubling from February, the central bank said. New Zealand’s exports surged 17 percent from the previous month, the first back-to- back increase since December 2007, the statistics bureau said.

Korean stocks headed for their first gain in four days and the New Zealand dollar strengthened. Reports yesterday showed U.S. consumer confidence jumped by the most since 2005, an index of U.K. retail sales rose to the highest in more than a year and Italian businesses grew more optimistic in April, igniting speculation the worst may be over for the global recession.

“There are signs of positive momentum in the region’s exports,” said Stephen Walters, chief economist at JPMorgan Chase & Co. in Sydney. “here’s some evidence the global manufacturing cycle has improved a little.”

There is growing evidence stronger demand from China is helping exports recover. New Zealand’s exports to China climbed 39 percent in March from February, according to today’s data.

Earlier reports show Singapore’s shipments to China surged 29 percent last month from February, while those from Japan, South Korea and Taiwan to China also rose.

Korean Shares

South Korea’s Kospi stock index gained 1.7 percent to 1,322.74 at 11:45 a.m. in Seoul. Shares in exporter Samsung Electronics Co. rose 0.7 percent, those in LG Electronics Co. climbed 6 percent and Posco shares advanced 0.5 percent. The won increased 0.7 percent to 1,346.9 against the U.S. currency.

New Zealand’s dollar strengthened to 56.27 U.S. cents at 2:46 p.m. in Wellington from 55.82 cents just before the trade report was released.

The MSCI Asia Pacific index of shares edged up 0.4 percent to 87.36 as of 9:45 a.m. in Hong Kong. The index has risen almost 8 percent in April amid optimism governments worldwide will succeed in easing the global recession.

China’s $585 billion stimulus package should contribute “strongly” to expansion in Asia, the World Bank said this month. Goldman Sachs Group Inc. last week raised its 2009 growth forecast for China’s economy to 8 percent from 6 percent previously, citing the stimulus.

China’s Role

“The apparent recovery is China’s growth is playing a big role,” said Shane Oliver, head of investment strategy at AMP Capital Investors in Sydney. “The authorities there have been the most determined to turn their economy around.”

Taiwan’s AU Optronics Corp. said April 23 that liquid- crystal-display sales will rise 50 percent this quarter from the previous three months, helped by orders from China.

Nissan Motor Co., Japan’s third-largest carmaker, said this month its sales in China climbed 13.7 percent in March.

Hyundai Motor Co., South Korea’s largest automaker, expects sales to China to increase by more than 11 percent this year.

The current-account report showed South Korea’s exports, on a free-on-board basis which excludes freight and insurance costs, rose to a five-month high of $30.4 billion in March, up 20 percent from February.

Still, Finance Minister Yoon Jeung Hyun cautioned against being too optimistic on the outlook for an economic recovery.

‘Negative Signs’

“We have positive signs and negative signs,” Yoon said today at the government’s weekly so-called emergency economic meeting. “Korea’s economy is in a down cycle, but the speed of the contraction is slowing.”

The International Monetary Fund last week predicted a global economic contraction of 1.3 percent this year, compared with its January projection of 0.5 percent growth.

From a year earlier, most Asia-Pacific nations are still reporting plunges in exports: In March, Japan’s shipments sank 46.4 percent; Taiwan’s sank 35.7 percent from a year earlier and South Korea’s declined 22 percent.

To contact the reporters on this story: Tracy Withers in Wellington at twithers@bloomberg.net; Seonjin Cha in Seoul at scha2@bloomberg.net.

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Crude Oil Falls a Third Day as Swine Flu May Derail Economies

By Christian Schmollinger

April 29 (Bloomberg) -- Crude oil fell for a third day on concern that fuel demand will drop as the swine-flu outbreak delays a recovery from the global recession and after a report showed U.S. stockpiles climbed to an 18-year high.

Oil and gold fell as swine flu cases expanded in New York City and equities declined on speculation that banks including Citigroup Inc. may need more capital. The industry-funded American Petroleum Institute said yesterday crude stockpiles rose 4.58 million barrels to the most since August 1990. The U.S. Energy Department’s supply report will be out later today.

“I’m really surprised that we’re not lower with the swine- flu and the news on Citi,” said Jonathan Kornafel, a director for Asia at options traders Hudson Capital Energy in Singapore. “How long can the supply and demand figures be ignored? There is a lot of downward pressure on commodity and equity markets.”

Crude oil for June delivery fell as much as 80 cents, or 1.6 percent, to $49.12 a barrel in electronic trading on the New York Mercantile Exchange. It was at $49.21 a barrel at 10:27 a.m. Singapore time. The contract fell 22 cents to settle at $49.92 a barrel yesterday. Prices are up 12 percent this year.

The World Health Organization yesterday raised its global pandemic alert to the highest since the warning system was adopted in 2005, saying the disease is not containable.

The concerns about swine-flu’s effects on the global economy caused commodities including copper and gold to drop yesterday, with the Reuters/Jefferies CRB Index of 19 commodities declining 0.97 point, or 0.4 percent, to 217.22.

Commodities Drop

Bullion for immediate delivery lost as much as 0.6 percent to $887.96 an ounce, and was at $889.35 at 8:56 a.m. in Singapore, down 2.6 percent this week. Copper for three-month delivery on the London Metal Exchange stood at $4,187 a metric ton at 10:03 a.m. Singapore time.

Brent crude for June settlement fell as much as 74 cents, or 1.5 percent, to $49.25 a barrel and was at $49.36 at 10:30 a.m. Singapore time on London’s ICE Futures Europe exchange. It fell 33 cents, or 0.7 percent, to end the session at $49.99 a barrel yesterday.

An Energy Department report later today will probably show that U.S. crude oil stockpiles rose by 1.8 million barrels last week, according to the median of 14 analyst responses in a Bloomberg News survey. Supplies climbed to 370.6 million barrels in the week ended April 17, the highest since September 1990.

The API report, released after the end of floor trading yesterday, showed supplies rose to 374.8 million last week.

Gasoline stockpiles increased 200,000 barrels from 217.3 million the prior week, according to the Bloomberg survey. Inventories of distillate fuel, a category that includes heating oil and diesel, rose 1 million barrels from 142.3 million.

To contact the reporter on this story: Christian Schmollinger in Singapore at christian.s@bloomberg.net

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Sinopec Expects Higher Profit on Eased Price Controls

By John Duce

April 29 (Bloomberg) -- China Petroleum & Chemical Corp., Asia’s biggest refiner, said profit may grow more than 50 percent in the first half after the government eased fuel-price controls and crude oil costs dropped from a record.

First-quarter net income jumped 85 percent to 11.2 billion yuan ($1.6 billion) from a year earlier, the Beijing-based company known as Sinopec said in a statement to the Shanghai stock exchange yesterday. Operating profit from refining was 7.3 billion yuan compared with a 25 billion-yuan loss a year earlier.

The Chinese government in December revised a fuel-pricing system to allow refiners to pass on increases in crude oil costs to consumers. China’s economy has shown signs of recovery, helping to boost fuel demand and brighten the company’s prospects, Chief Financial Officer Dai Houliang said today.

“The key question now for the whole of the second quarter is whether the government will allow oil product prices to rise further to reflect crude prices,” said Wang Aochao, an energy analyst at UOB-Kay Hian in Shanghai. “We think demand for gasoline and diesel will pick up in the second quarter as the Chinese economy picks up.”

Sinopec gained as much as 3.8 percent in Hong Kong trading and the stock stood at HK$5.75, a 2.7 percent increase at 10:35 a.m. The Hang Seng Index was up 1.4 percent. The shares have advanced 22 percent since March 29, when the refiner posted 2008 earnings that beat estimates. PetroChina Co., China’s biggest oil company, gained 6 percent in the period.

Oil Exploration

Sinopec will step oil exploration as oil prices may rise later this year, Dai told analysts on a conference call today.

Virtually all of Sinopec’s revenue comes from refining, petroleum products sales and petrochemicals. Only 3 percent is generated by oil and gas exploration and production.

By contrast, about 55 percent of the income of PetroChina was from exploration last year, according to its annual report. PetroChina’s first-quarter profit fell 35 percent after oil prices declined.

Sinopec’s profit fell 47 percent last year before the pricing changes were introduced and it was unable to pass on soaring oil costs to customers. Crude rose to a record $147.27 a barrel last July and has since fallen 66 percent. Fourth-quarter profit gained 98 percent to 13.3 billion yuan.

“Due to the changes in the pricing mechanism our refining business is now making a profit,” Dai said. “This is a dramatic change from last year.”

Sinopec’s net income may rise 59 percent to 47.5 billion yuan this year, according to the median of eight analysts’ estimates compiled by Bloomberg, as China’s stimulus measures help boost economic growth and revive oil demand.

China’s Economy

The nation’s economy is showing signs of recovery after growing at the weakest pace in nearly a decade in the first quarter, as a 4 trillion-yuan stimulus plan spurs factory production and investment. Urban fixed-asset investment surged by almost a third in March and industrial-output growth accelerated, according to government reports on April 16.

Sinopec’s capital expenditure will increase 4 percent this year, with spending on refining rising about 35 percent, the company said last month.

Expenditure was about 15.3 billion yuan in the first quarter, of which exploration and development accounted for 7.8 billion yuan and refining 1.6 billion yuan, according to yesterday’s statement. No comparative numbers were given.

Sinopec will be able to take advantage of its strength in marketing and management to turn its refining operations into a major profit contributor, it said last month. The growth of the Chinese economy is only partially influenced by the global slowdown and domestic demand for oil and petrochemical products remains robust, the company said.

Oil Processing

Oil processing at Sinopec’s refineries may increase 8.9 percent to 184 million metric tons this year, the company said. In the first quarter, oil processing reached 40.5 million tons. Oil-product sales fell 12 percent to 26.4 million tons in the three months, yesterday’s statement showed.

Crude production rose 0.6 percent to 10.4 million tons in the first quarter. The company boosted gasoline output by 15 percent while reducing diesel yield by 8.8 percent.

Natural-gas output fell 3.7 percent to 1.98 billion cubic meters in the first three months. Sinopec said the construction of a gas pipeline to deliver the fuel from its Puguang field in the southwestern province of Sichuan to Shanghai will be completed in June.

Sinopec plans to boost crude-oil output this year by 1.4 percent to 42.4 million tons and natural-gas production by about 20 percent to 10 billion cubic meters.

To contact the reporter on this story: John Duce in Hong Kong at Jduce1@bloomberg.net

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Dollar Is Little Changed Versus Euro Before U.S. GDP Report

By Ron Harui and Ye Xie

April 29 (Bloomberg) -- The dollar was little changed against the euro before a U.S. report today that may show the world’s largest economy shrank at a slower pace in the first quarter, reducing demand for the safety of the greenback.

The euro traded near a six-week low versus the yen on concern disagreement is deepening among European Central Bank officials on the steps needed to combat the recession. Mexico’s peso rose from the weakest level in almost four weeks yesterday on speculation the government will contain the swine flu outbreak and limit its impact on an already faltering economy.

“Any signs that the pace of contraction in the U.S. economy is easing will probably bolster investor confidence” in higher-yielding assets, said Danica Hampton, a currency strategist at Bank of New Zealand Ltd. in Wellington. “This is likely to reduce ‘safe-haven’ demand for the dollar.”

The dollar traded at $1.3124 per euro as of 8:10 a.m. in Singapore from $1.3149 yesterday in New York. The U.S. currency was at 96.60 yen from 96.45 yen. The euro traded at 126.75 yen from 126.79 yen.

Mexico’s peso was at 13.8194 per dollar from 13.8196 yesterday, when it declined to 14.1382, the weakest level since April 1. The currency plunged 5.1 percent on April 27 as the swine flu outbreak spread.

The volume of currency trading is likely to be less than normal because of a national holiday in Japan, said Sean Callow, senior currency strategist at Westpac Banking Corp. in Sydney.

U.S. Economy, Fed

The U.S. economy probably contracted at an annual rate of 4.7 percent in the first quarter after shrinking 6.3 percent in the final three months of 2008, according to a Bloomberg News survey. The Commerce Department will release the report at 8:30 a.m. in Washington.

The Federal Reserve will keep its target lending rate in a range of zero to 0.25 percent, a separate Bloomberg survey showed. Policy makers will announce the decision on interest rates and goals for purchases of Treasuries and mortgage securities at 2:15 p.m. in Washington.

“The U.S. economy is not falling as fast as last year, which is a good thing,” said Robert Blake, head of strategy for North America in Boston at State Street Global Markets LLC, with $11.3 trillion in assets under custody. “Institutional investors have unwound long dollar positions even though they haven’t gone outright short. The market lacks direction at the moment.” A long position is a bet an asset will appreciate.

The dollar dropped yesterday against the euro on reduced demand for safety as the New York-based Conference Board said its consumer confidence index climbed to 39.2 this month, the highest level since November, from 26.9 in March. The gain in the index was the biggest since 2005.

‘Play Out’

“A slower rate of economic decline continues to play out,” said Andrew Busch, a global currency strategist at BMO Capital Markets in Chicago. “Risk is being put back on, and the euro rallied a bit.”

The peso rose 1.7 percent versus the dollar yesterday, the most in a week, as Mexico City will close all 35,000 restaurants through May 5 to prevent the spread of the swine flu. As many as 152 people have died in Mexico from flu-related causes, and the number of worldwide cases of the virus confirmed by laboratory tests reached 105, officials said.

The spread of the swine flu beyond Mexico prompted the World Health Organization to increase its global pandemic alert to the highest since it adopted the warning system in 2005.

ECB Officials

The euro may weaken against the yen and the dollar on speculation discord is increasing among ECB policy makers over measures needed to counter the recession.

ECB Executive Board member Lorenzo Bini Smaghi yesterday devoted much of his speech to highlighting the difficulties for the central bank of buying assets, suggesting he shares Bundesbank President Axel Weber’s view.

Weber has said he doesn’t favor cutting the benchmark rate below 1 percent and is against buying assets, while others such as Athanasios Orphanides of Cyprus don’t want to rule those options out. Fellow member Juergen Stark will speak today in Siegen, Germany, and Ewald Nowotny will speak in Vienna tomorrow.

Investors raised bets the ECB will cut its 1.25 percent target lending rate at its next meeting on May 7. The implied yield on the three-month Euribor interest-rate futures contract for June delivery fell to 1.280 percent yesterday from 1.295 percent on April 27.

To contact the reporter on this story: Ron Harui in Singapore at rharui@bloomberg.net; Ye Xie in New York at yxie6@bloomberg.net.

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Australian Stocks Fall on ANZ Profit; South Korea Shares Advance

Australian Stocks Fall on ANZ Profit; South Korea Shares Advance

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By Darren Boey

April 29 (Bloomberg) -- Australian stocks fell, led by banks, after Australia & New Zealand Banking Group Ltd. said first-half profit slumped. South Korean stocks rose as the country’s current-account surplus widened to a record.

The S&P/ASX 200 Index lost 0.3 percent to 3696.90 as of 10:16 a.m. in Sydney. The Kospi Index climbed 0.6 percent to 1,307.84 in Seoul. The MSCI Asia Pacific excluding Japan Index rose 0.2 percent. Japan is shut today for a holiday.

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USD Drifts Lower Ahead of FOMC

by Korman Tam

The dollar gave back some of its recent gains against the euro, falling to 1.3166 while dropping to 95.61 versus the yen. The FOMC kicked off its two-day monetary policy meeting earlier and will be announcing the results Wednesday afternoon. With the Fed’s benchmark lending rate already at zero, there is likely to be no change in interest rates. The key focus will be whether the FOMC will continue to ease policy through alternative measures. The policy statement will also be closely scrutinized.

US equities clawed back into positive territory following a surprise reading in the Conference Board’s survey of consumer confidence, which sharply beat expectations in April at 39.2 from a revised reading of 26.9 a month earlier. The bounce in consumer confidence marked its strongest reading since November 2008. The February Case-Shiller home price index declined by 2.2% on a monthly basis versus a 2.8% drop in the previous month, while declining by 18.63% compared with a revised 19% drop a year earlier. Also released was the April Richmond Fed manufacturing index posted a -9.0 reading compared with -20 in the previous month.

The economic calendar for Wednesday will see Q1 GDP and PCE. On an annualized basis, the economy is estimated to contract by 5.0%, versus 6.3% previously. The personal consumption index is estimated to increase by 0.9% in the first quarter compared with a 4.3% decline, while the core PCE is estimated to increase by 1.5%versus 0.9%.

JPY Edges Higher

The yen advanced against the greenback, pushing up to 95.61 in the New York session. A barrage of Japanese data is due out in early Wednesday trading, consisting of March industrial production, housing starts and construction. The Bank of Japan will also announce the results of its policy deliberations. The BoJ is not expected to make any changes.

USDJPY hovers near 96.40, with support starting at 96, backed by 95.70 and 95.30. Subsequent floors are eyed at 95, followed by 94.60 and 94.20. On the upside, gains will emerge at 96.50, backed by 96.75 and 97.

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