What’s bank research saying today

• Morgan Stanley are fairly non-committal except to maintain that liquidity will remain patchy for a week or so;
• Deutsche Bank remain bullish on USD/JPY and said as much in a note to investors, suggesting that further gains are likely albeit in a 3-steps-forward-2-steps-back formation;
• RBS are also bullish on USD/JPY, given the renewed fall in Japanese interest rates but they are neutral on AUD, with falling commodity prices counter-balanced by a global search for yield;
• Credit Suisse remain bearish on EUR/USD and are moderately bullish on AUD/NZD;
• ANZ saw today’s Chinese data as another sign that the big Asian economy is stabilising. With regard the NZD, they also reduced their 2014/15 milk price forecast again to $4.35kg MS (milk auction later today);
• Nomura read the Chinese data differently and see the economy turning lower again after this brief respite (pretty hard to argue with the track record of Nomura’s economic team);
• WestPac are slightly more bullish on the milk price and think the emerging NZ drought of uncertain severity could produce extra demand at this auction and thus support prices.