Forex Market Updates & Commentary

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• Forex QUICK: EURUSD breaks below trendline and tests 200 bar MA
• Forex Morning Report - May 18th
• Canada International Securities shows selling in March
• PPI inflation not a problem Housing mixed
• Housing Starts Stronger, PPI Weaker
• Forex QUICK: GBPUSD falls to 100 and 200 bar MA support as fails on move higher
• Forex QUICK:EURUSD moves to topside trendline resistance at 1.2444
• US Economic Data for May 18
• Forex QUICK: USDCAD tests 100 hour MA at the 1.0260 level
• NY Opening Forex Commentary is available for viewing
• BOE’s King
• ZEW Economists Comment…..
• ZEW’s Franz Comments:
• EUR Trades Higher After Eurozone Data
• UK CPI

Forex QUICK: EURUSD breaks below trendline and tests 200 bar MA Posted: 18 May 2010 07:18 AM PDT

Forex Morning Report - May 18th Posted: 18 May 2010 06:30 AM PDT Forex Morning Report - May 18th

Canada International Securities shows selling in March Posted: 18 May 2010 05:43 AM PDT Foreigners sold C$616 million of Canadian Securities in March.   At the time the Canadian dollar was approaching the all important parity level. Perhaps there was some profit taking at the time especially since the expectation of Canada rate hike increased and the currency was at a higher level. In any case, the data is old so the effect should have limited impact.

PPI inflation not a problem Housing mixed Posted: 18 May 2010 05:36 AM PDT The PPI is not a problem. YoY ex Food and Energy is at 1.0%. The headline is +5.5% but not a concern. Housing Starts were higher but Permits were down sharply to 606K from 685K. This suggests a decline in starts down the road. So mixed.

Housing Starts Stronger, PPI Weaker Posted: 18 May 2010 05:32 AM PDT Producer Price Index (MoM):     Survey:0.1%    Actual:-.1%    Prior:0.7%   PPI Ex Food & Energy (MoM):    Survey:0.1%    Actual:.2%    Prior:0.1%    Producer Price Index (YoY):     Survey:5.6%    Actual:5.5%    Prior:6.0%    PPI Ex Food & Energy (YoY):     Survey:0.9%    Actual:5.5%    Prior:0.9%    Housing Starts:    Survey:650K    Actual:672K    Prior:626K    Revised:635K Housing Starts (MoM)%:    Survey:3.8%    Actual:5.8%    Prior:1.6%    Revised:5.0% Building Permits:    Survey:680K    Actual:606K    Prior:685K    Revised:685K Building Permits (MoM)%:    Survey:0.0%    Actual:-11.5%    Prior:7.5%    Revised:5.4%

Forex QUICK: GBPUSD falls to 100 and 200 bar MA support as fails on move higher Posted: 18 May 2010 05:25 AM PDT

Forex QUICK:EURUSD moves to topside trendline resistance at 1.2444 Posted: 18 May 2010 05:15 AM PDT

US Economic Data for May 18 Posted: 18 May 2010 05:12 AM PDT

Forex QUICK: USDCAD tests 100 hour MA at the 1.0260 level Posted: 18 May 2010 05:03 AM PDT

NY Opening Forex Commentary is available for viewing Posted: 18 May 2010 04:40 AM PDT

BOE’s King Posted: 18 May 2010 02:39 AM PDT BOE Governor Mervyn King made the following comments: Oil prices, Vat rise, and past falls in sterling largely account for April CPI rise. Temporary factors mask downward pressure on CPI from substantial spare capacity. It is likely that inflation will fall back to the target within a year; the pace and extent are uncertain. MPC is very conscious of risks to inflation in both directions.

ZEW Economists Comment….. Posted: 18 May 2010 02:23 AM PDT Sentiment was at 51 points before the rescue package was announced, after May 10 it went to 43.2. Rescue package will reduce deficits, but also reduce demand. See medium growth down in Germany due to the rescue package. Fewer experts see the ECB raising rates within the next 6 months.

ZEW’s Franz Comments: Posted: 18 May 2010 02:09 AM PDT Despite dampened expectations, experts expect German business activity to continue to recover over the next 6 months. Assessment may have been reinforced by increases in German exports and industrial production. The decline of sentiment may reflect rising uncertainty on consolidation of public budgets. Another reason may be uncertainty with regard to further development in the euro exchange rate.

EUR Trades Higher After Eurozone Data Posted: 18 May 2010 02:05 AM PDT The market sold euros in anticpation of the data, but has since pushed it back towards session highs. The details are as follows: German ZEW Economic Sentiment - Survey: 47.1   Actual: 45.8   Prior: 53.0 CPI (y/y) - Survey: 1.5%   Actual: 1.5%   Prior: 1.5% Core CPI (y/y) - Survey: 0.9%   Actual: 0.8%   Prior: 1.0% Eurozone ZEW Economic Sentiment - Survey: 44.2   Actual: 37.6   Prior: 46.0 Eurozone Trade Balance - Survey: 1.7B   Actual: 0.6B   Prior: 1.8B

UK CPI Posted: 18 May 2010 01:33 AM PDT The GBP traded slightly higher after April CPI and RPI came in better than expected. The details are as follows: CPI (y/y) - Survey: 3.5%   Actual: 3.7%   Prior: 3.4% RPI (y/y) - Survey: 4.8%   Actual: 5.3%   Prior: 4.4% Core CPI (y/y) - Survey: 2.9%   Actual: 3.1%   Prior: 3.0%

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