US Morning Notes – USD lower, equity rise boosts EUR, UK inflation surge
Tuesday, May 18th, 2010FX Highlights
- The USD is trading mixed to lower pressured by a modest recovery in equity markets sparked by news that Greece received €14.5bln from the EU to repay bonds and in reaction to above forecast UK inflation, EUR traded higher supported by the news of today’s Greek financial support which helped to dampen investor risk aversion, EUR gains were limited by report of weaker than expected German investor sentiment and ongoing uncertainty about whether the Greek debt crisis can be contained, GBP trades higher supported by report of a sharp rise in its UK CPI for April with gains limited by a statement from BOE Governor King that the CPI rise is likely temporary, AUD trades higher with gains limited by the RBA minutes which suggest that RBA policy is on hold, CAD trades higher supported by a rally in the price of crude, JPY trades lower as risk appetite improves and European currencies rebound in cross trade
- Focus turns to today’s release US housing starts, building permits and PPI
- Japan’s March tertiary index falls by 3%, Reuters Tankan manufacturing sentiment rises to +4, the highest level since March of 2008, consumer confidence hit a two-year high, JPY lower
- RBA minutes for the May 4th policy meeting state that rates are well placed for now, and the inflationary impact of rising resource prices is outweighed by EUR concerns, AUD higher
- UK April CPI rose more than forecast at 3.7% y/y, the CPI rise is attributed to higher energy prices and weak GBP, BOE’s King says he expects inflation will be back to target within a year, GBP mixed
- EU April CPI rose by 0.5%, German ZEW index dips to 45.8 from 53 last month, French finance minister says EUR is solid and EU must back the rescue pledge, EUR higher
- The U.S. Senate Monday voted to hold back some support on IMF aid, the New York Times reports of concern that the EU crisis could snowball
- May NAHB housing index rose to its highest level since August of 2007 rising to 22 compared to forecast of 20
- US equity markets set to open higher, European equities 1% higher, Nikkei closed 7 points lower
Upcoming Events
- US-Tuesday, April housing starts will be released expected at 650k compared to 626k last month along with April building permits expected at 680k compared to 685k last month and April PPI expected at 0.1% compared to 0.7% last month
- CAN-Tuesday, no major Canadian economic data is due for release today
Written by Easy-Forex
