Forex Market Updates & Commentary

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• SNB Jordan on the newswires
• Philadelphia Fed Stays the Same as Leading Indicators comes in Worse
• Philadelphia Fed and Leading Indicators Data due at 10AM
• Forex Morning Report - May 20th
• ECB’s Trichet on the Newswires
• Forex QUICK:USDJPY moves lower on weaker Intial Claims/Break of trendline
• Jobless Claims Data Worse than Expected
• Initial Jobless Claims and Continuing Claims Data this Morning
• Forex QUICK: EURUSD up and down as consolidation consolidation continues
• The NY Opening Forex Commentary for May 20th is available for viewing
• Bank of England’s Posen speaks on Euro
• Swiss ZEW Economic Expectations
• Merkel on the wires…
• UK Retail Sales
• Gold retraces hourly move

SNB Jordan on the newswires Posted: 20 May 2010 07:06 AM PDT The SNB Jordan is on the newswires saying that Switzerland has a big interest in EURO Aid Plan success and that EURO crisis risk can not be underestimated.  He also warns that he won’t allow deflation risk to increase and that the SNB will defend against excessive Franc gain The CHF has been a safe haven currency in the face of US problems first and now EURO problems. As a result, its currency has been strong but with a strong currency and an economy which is dependent on counterparties like US and EURO region, as those economies go, so does the Swiss economy.  When the currency becomes a safe haven it can cause deflationary pressures as a higher currency makes imports cheaper but hurts exports. Meanwhile, domestic spending is slow. The double hit from slow domestic growth and slow export growth increases deflation risk.  They don’t want deflation. Hence they intervene like they did yesterday and are trying to do through these comments.

Philadelphia Fed Stays the Same as Leading Indicators comes in Worse Posted: 20 May 2010 07:01 AM PDT Leading Indicators:    Survey: 0.2%     Actual:  -.1%    Prior:  1.4%    Revised:  1.3% Philadelphia Fed:     Survey: 21.3      Actual: 21.4      Prior:  20.2  FED PRICES-RECEIVED 3.5 VS 1.0 last month  FED EMPLOYMENT INDEX 3.2 VS 7.3 last month  FED PRICES-PAID INDEX 35.5 VS 42.7 last month  FED NEW ORDERS INDEX 6.1 VS 13.9 last month  FED FACTORY INDEX 21.4 VS 20.2 last month The pieces of the report are a little less encouraging with New Orders index down and the Employment index also lower from the prior month

Philadelphia Fed and Leading Indicators Data due at 10AM Posted: 20 May 2010 06:33 AM PDT

Forex Morning Report - May 20th Posted: 20 May 2010 06:30 AM PDT Forex Morning Report now available from FXDD

ECB’s Trichet on the Newswires Posted: 20 May 2010 06:13 AM PDT recent events confirmed ECB policy approach ECB takes decisions independently of governments ECB is fiercely independent bond purchases resolve malfunctioning of some markets ECB not engaged in “any form of quantitative easing” monetary policy stance “appropriate” price stability goal more important in crisis must ensure more resilience of financial system bond purchases ensure policy transmission

Forex QUICK:USDJPY moves lower on weaker Intial Claims/Break of trendline Posted: 20 May 2010 05:42 AM PDT

Jobless Claims Data Worse than Expected Posted: 20 May 2010 05:30 AM PDT Initial Jobless Claims:    Survey: 440K      Actual: 471K    Prior:  444K    Revised:  446K Continuing Claims:    Survey: 4605K      Actual: 4625K    Prior:  4627K    Revised:  4665K

Initial Jobless Claims and Continuing Claims Data this Morning Posted: 20 May 2010 05:08 AM PDT

Forex QUICK: EURUSD up and down as consolidation consolidation continues Posted: 20 May 2010 04:59 AM PDT

The NY Opening Forex Commentary for May 20th is available for viewing Posted: 20 May 2010 04:43 AM PDT

Bank of England’s Posen speaks on Euro Posted: 20 May 2010 02:08 AM PDT BOE’s Posen comments in Spiegal interview are as follows; * Whole world put pressure on EU-16 to stop Greek crisis * EU could take further measures, could save more * ECB bond purchases are a de facto fiscal transfer * Euro has lost opportunity to be a real global currency Eur/Usd has come off about 20 points since comments, trading at 1.2390.

Swiss ZEW Economic Expectations Posted: 20 May 2010 02:03 AM PDT Swiss ZEW Economic Expectations came in at 40.5, weaker than the prior rerading of 53.4. There were no estimates for this figure. Usd/Chf  and Eur/Chf relatively unaffected by release, trading at 1.1490 and 1.4250 respectively.

Merkel on the wires… Posted: 20 May 2010 01:46 AM PDT Every financial product and centre must be regulated in the future. Euro zone is sticking together and ready to take necessary political action. Each Euro zone country must make a contribution to the function of the euro. We must tackle Euro zone problems at their roots; need to toughen stability pact. Concerned about the extent of international coordination of exit strategies. Banks must not be allowed to blackmail states. Hopes an international bank levy can be agreed. will push for bank levy at G20 summit. There should be a European rating agency.

UK Retail Sales Posted: 20 May 2010 01:34 AM PDT The GBP higher after Aprils m/m retail sales came in at 0.3%; in line with the forecast was 0.3% and slightly worse than last months reading of 0.4%. Strength was shown in clothing and department stores, which offset the weakness in hardware and electrical sales. Currently, sterling is trading off session highs.

Gold retraces hourly move Posted: 19 May 2010 11:54 PM PDT Following up on yesterday’s post; yesterday gold was trading in the area of the 61.8% retracement level (1208.86) on the move from the low on May 7th to the high on May 14th. We said that the downside target was around 1200.34, but over the last 24 hours gold has finished retracing the entire move and has made a session low of 1181.98. If the pair can continue this bearish move, the next possible target is 1172.26, where support was found on the 4th and 5th of May.

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