DAILY MARKET COMMENTARY
13 April 2011 – 8:00 GMT
Wednesday
____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
FUNDAMENTAL ANALYSIS at 0800 GMT
USD
FX price action was relatively subdued during the Asia session, given the lack of news and data flow. EURUSD traded 1.4455-1.4498, USDJPY 83.51-84.20. Asian equities were modestly stronger after the S&P 500 fell -0.78%. New York Fed President Dudley said QE2 is not designed to influence the dollar and the risk of deflation is now "greatly diminished." But until market participants get more clarity on the Fed's next steps, the dollar will be prone to weakness when risk sentiment is positive. Its safe-haven status could also remain unclear, judging by recent performance vs. the Swiss franc and the yen. Retail sales and the Fed Beige Book are due.
EUR
The ZEW surveys in Germany were mixed, with the current situation indicator rising to 87.10 (cons. 85.2), while the economic growth sentiment indicator fell back to 7.60 (cons. 11.30). The report suggests that Germany is probably at the upper point of its current economic cycle and there were concerns over second-round price effects from higher commodity prices.
German CPI was in line with consensus, staying unchanged at 2.1% y/y.
GBP
Sterling weakened after headline CPI for March came in well below consensus at +4.0% y/y (cons. +4.4%). With an uncertain growth outlook and deep internal divisions on the MPC, we remain cautious on sterling. Our UK economist points towards the April 27 Q1 GDP print for an indication of whether the middle-ground voters will join the hawks.
UK retail sales for March were disappointing, falling by -3.5% y/y. The drop in total sales is the worst since the BRC started collecting data in 1995. This is convincing evidence that austerity measures are feeding through into consumer demand.
CAD
The Bank of Canada kept policy unchanged as expected and adjusted its 2011 GDP forecasts to 2.9% (from 2.4% in January MPR) and to 2.6% (from 2.8%) for 2012. Officials said recent growth, though stronger than anticipated, is still largely consistent with their January projections and they reiterated that any further reduction of stimulus would need to be carefully considered. The BoC cited CAD strength as a challenge again and said it sees the emergence of broader global inflationary pressures due to commodity prices.
AUD
The upcoming speech by RBA Governor Stevens could provide some useful insight into current RBA thinking after recent mixed data releases. Stevens is expected to maintain his neutral stance and signal that the RBA is on hold for now.
A. White
Analyst at Fibosignals.com
DISCLAIMER: Fibosignals.com’s Daily Market Commentary is provided for informational purposes only. The information contained in these reports is gathered from reputable news sources and is not intended to be used as investment advice. Fibosignals.com assumes no responsibility or liability from gains or losses incurred by the information herein contained. Opinions, conclusions and other information expressed in this message are not given or endorsed by Fibosignals.com unless otherwise indicated by an authorized representative.
No comments:
Post a Comment