Forex Market Updates & Commentary

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• The NY Morning Commentary is available for viewing
• ECB’s Trichet on the Newswires
• EUR/USD into the goal posts after gaping higher overnight
• Bobbys Corner-Open Market-May.10.2010
• Canada Housing Starts Come Out a Touch Worse than Expected
• Canada Housing Data Expected to be Same as Previous
• Central Banks Engage in Dollar Swap Agreement
• EU Press Conference on Loan Package
• Former RBA Governor Gregory on the Wire
• BOJ Meeting Minutes
• Euro Gaps Higher on Bailout Fund

The NY Morning Commentary is available for viewing Posted: 10 May 2010 05:59 AM PDT

ECB’s Trichet on the Newswires Posted: 10 May 2010 05:56 AM PDT Indicates bond purchase decision was not unanimous ECB wasn’t pressured into buying government bonds “overwhelming majority” backed bond-purchase plan sees multi-speed global recovery says no time for complacency on inflation risks term deposits one option to sterilize purchases sees upside inflation risks in some countries ECB decisions wont change monetary policy stance says term deposits simple effective to operate

EUR/USD into the goal posts after gaping higher overnight Posted: 10 May 2010 05:54 AM PDT The EUR/USD has moved into the goal posts on the 1 hour timeframe after gaping higher overnight on Sunday. The news of a possible end to the Greece situation added strength to the Euro caused the pair to gap higher, pushing the pair into the goal posts between the 100MA 1.2850 (blue line) and the 200MA 1.3040 (green line). The market will now need to break above or below this range to give an indication as to what the next short term trend will be. It is also important to remember of late, that the markets have been tending to fill gaps and as such there could be a bias to a stronger USD dollar. The top of the gap comes in at 1.2807. The bottom of tha gap is at 1.2730 with a range of almost 80 pips. The pair will have to break the 100MA 1.2850 to make this a reality.

Bobbys Corner-Open Market-May.10.2010 Posted: 10 May 2010 05:23 AM PDT Good morning: I have arrived safely from Jordan, where we had a wonderful trade show and conference. The Euro rose  the most in 18 months, world equity markets jumped up, and Greek bonds soared as EU policy makers unveiled a plan to end the regions sovereign debt issuses with a $960 billion loan plan.  EU member countries pledged the loan plan to countries under attack from speculators trying to manipulate the FX markets.  The rescue packages will calm nerves in the short term, but the question will be how the EU and member countries will pay for this package.  World equity markets jumped, and US futures are pointing to a large positive opening this morning. Oil is higher, and Gold is lower. No major economic data due out today. HAVE A GREAT DAY & GOOD LUCK

Canada Housing Starts Come Out a Touch Worse than Expected Posted: 10 May 2010 05:16 AM PDT Housing Starts:   Survey: 205.00K   Actual:201.7K   Prior:197.3K   Revised:199.2K

Canada Housing Data Expected to be Same as Previous Posted: 10 May 2010 05:02 AM PDT

Central Banks Engage in Dollar Swap Agreement Posted: 09 May 2010 06:26 PM PDT The Bank of Japan, Federal Reserve, Swiss National Bank, European Central Bank, the Bank of England and Canada’s Central Bank will participate in a temporary international dollar swap aimed to improve liquidity and ease market tension. The ECB will conduct ‘interventions’ in public and private debt markets. The ECB will reactivate swap lines with the Fed, however they said the steps will not affect monetary policy. The USD received a major boost on this release improving across the board.

EU Press Conference on Loan Package Posted: 09 May 2010 05:41 PM PDT EU has agreed on a 500b Euro loan package. EU’s Proell says Portugal and Spain must announce more steps by May18. Spains Salgado says ‘creation of a European stabilization mechanism.’ Germany says legal basis of EU 440B package to be worked out ‘in next days.’ 60B to available as loans. Portugal Finance Minister says IMF contribution up to 220B. Portugal hopes not have to use aid package. Frieden says ECB to announce intervention in markets. He did not specify what sort of market action planned. Frieden says IMF contribution 200-250B euros extra. Rehn says ECB will announce its planned measures, adding ‘very significant operations’ taken by the ECB. Rehn says ECB has taken a decision to intervene in secondary markets. The Euro again received a bid on these releases moving back above the 1.29 handle against the USD following the comments in regards to market intervention by the ECB.

Former RBA Governor Gregory on the Wire Posted: 09 May 2010 05:16 PM PDT Former RBA Governor Gregory spoke early in Asian trading commenting that current Governor Stevens has raised rates too quickly and that the RBA shouldn’t have been so keen to raise rates. He added he believes they will wait before further increases. In addition he had the following comments which helped push the AUD lower: Could have paced rises ‘a bit more.’ Prospects of global slowdown very real. Global economy ’still in bad shape.’

BOJ Meeting Minutes Posted: 09 May 2010 05:06 PM PDT The Bank of Japan’s meeting minutes were released as follows for the April 6-7 board meeting: See sustained economic recovery. Fiscal deficit may slow European growth. Lending facility underpins confidence. BOJ lending program supports stocks and forex. Must watch impact of credit program. One member expects earlier than expected CPI gains. Narrower output gap may be affecting CPI. Fiscal deficit is global concern. The market has showed little reaction to this report, with the Yen gaining on most currencies after the gap higher against the Yen following the creation of the Euro-Zones emergency fund over the weekend.

Euro Gaps Higher on Bailout Fund Posted: 09 May 2010 03:24 PM PDT The EUR/USD pair gapped higher over 200 pips early in Asian trading on reports that EU Finance Ministers held a summit over the weekend to create an emergency fund to stop the sovereign-debt crisis spreading through Europe, the emergency fund is reported to be worth approximately 500b euros. The 4+% decline in the Euro last week was the largest weekly decline since the Lehman Brothers collapse and surely helped spark the meeting. On the weekly chart below we see the Euro has rallied back to what was formerly trendline support and the move from here could go a long way to showing how the next few trading sessions will play out.

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