29th of April 2011 - Fundamental Forex Market Overview

DAILY MARKET COMMENTARY
29 April 2011 – 8:00 GMT
Friday

____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________


FUNDAMENTAL ANALYSIS at 0800 GMT

USD
With Japan on holiday, and the FOMC statement fully digested, the price action during the Asia session was relatively subdued. EURUSD traded 1.4773-1.4848, USDJPY 81.47-81.71. Earlier, US equities closed modestly positive and Treasury yields moved lower across the curve. Gold made no further gains and is trading at $1532.52 at the time of writing. US real GDP rose at a +1.8% annual rate in Q1, below consensus estimates. However, given Fed Chairman Bernanke's warning that the number could be weak, the US dollar was not unduly affected. The deceleration mainly reflected a slowing of consumer spending growth and a drag from the government sector. In other data, jobless claims jumped, which probably reflected Easter distortions. Having said that, the downtrend in claims does appear to have paused for now. Chicago PMI and the University of Michigan confidence index are due but are not likely on their own to revive the dollar's fortunes.

EUR
Sovereign CDS spreads in the Eurozone finally tightened and bond yields moved lower. Talks on the proposed program of external assistance for Portugal continue, but have not yet reached a conclusion. There were further headlines from Eurozone officials, denying a Greek debt restructuring.

ECB Governing Council member Mersch said the ECB will continue its gradual exit from its non-standard measures at an appropriate pace, and said the ECB never takes measures aimed at supporting banks in one particular country.

The flash estimate for Eurozone April CPI is due and is expected to remain in line with the March level at 2.7% y/y.

Germany's seasonally adjusted jobless rate for April was unchanged at 7.1% (cons. 7.0%). Unemployment numbers fell 37k.

The Swiss KoF print is likely to remain broadly stable, dipping marginally to 2.12 from the last reading of 2.24 but at the moment the CHF is driven by external factors and we question whether current gains are sustainable.

CAD
Our analysts expect -0.1% m/m for GDP in February, versus consensus 0.0%. Even if growth does slip, this would only be the third monthly decline in the past 21 months. The BoC has recently upped its 2011 GDP forecast, which means a weak monthly print today could be shrugged off.

NZD
The NZD was briefly boosted by a larger than expected trade surplus, which came in at NZ$464 mn (consensus NZ$200 mn).


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.