Monday, May 31, 2010

Forex Market Updates & Commentary

Forex Market Updates & Commentary

Link to Forex News and Commentary by FXDD

Forex QUICK: USDJPY moves higher on political turmoil

Posted: 31 May 2010 07:18 AM PDT

Forex QUICK: EURUSD consolidates in holiday trade. Tests support

Posted: 31 May 2010 06:56 AM PDT

NY Morning Forex Commentary is available for viewing

Posted: 31 May 2010 06:31 AM PDT

Forex QUICK: USDCAD prepares for BOC rate rise

Posted: 31 May 2010 05:56 AM PDT

Canada GDP better than expected at 6.1%

Posted: 31 May 2010 05:33 AM PDT

MoM for March also came in better at +0.6%.

The BOC is expected to reaise rates tomorrow. This should insure the liklihood of a rise.  The USDCAD has come under some pressure as a result. The price is below the 200 day MA now at the 1.0476 level now. A close below this level should be bearish for the pair.  Longer term, support comes in at the 100 day MA at the 1.0326 level currently.

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The Industrial Product and Raw Material Prices were also higher than expected.  The IPP index rose by 0.3%. A decline of -0.2% was expected.  The RMP Index meanwhile soared by 1.7% vs expectations of 1.4% gain.  These figures also point for the BOC to start the tightening process.

Canada RMPI and IPPI is due at 8:30 as well

Posted: 31 May 2010 05:01 AM PDT

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Canada GDP due out at 8:30 today

Posted: 31 May 2010 04:54 AM PDT

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ECB’s Weber

Posted: 31 May 2010 02:07 AM PDT

Bundesbank President and ECB member Axel Weber made the following comments:

  • Financial markets are still fragile, alertness is warranted.
  • Market tensions haven’t hurt the real economy yet.
  • Financial crisis is not yet over.
  • Spanish, Portuguese, and Greek fiscal efforts are only the start.
  • Must strengthen incentive to have solid finances.
  • The euro area should examine orderly insolvency mechanism.
  • Still critical of ECB bond purchases.
  • ECB bond purchases should be a “bridging” measure.
  • The euro area mustn’t become a transfer union.

Eurozone CPI Flash Estimate y/y

Posted: 31 May 2010 02:01 AM PDT

The market had a muted reaction to the Eurozone CPI flash estimate which came in at 1.6%; in line with its forecast and slighty better than the prior reading of 1.5%. The EUR is currently trading at the 1.2300 figure against the USD.

ECB Counsil Memebr Mario Draghi Speeks in Rome

Posted: 31 May 2010 01:35 AM PDT

  • ECB rate policy has been “strongly expansionary”.
  • ECB must stop bond buys “as quickly as possible”.
  • Euro are budget adjustments need to be rapid.
  • EU-IMF lending mechanism must be made operational.
  • EU needs stronger stability pact and sanctions.
  • Euro area has “sounder” budgets and trade balances.
  • EU needs more political and budgetary unity.
  • Attacks on Euro aimed at “weakest members”.
  • Italian deficit cuts “had to be taken”.
  • Effectiveness of spending cuts must be monitored.
  • “certain” G-20 bid for global rules will succeed.
  • The decline in Italian bank lending is slowing.

Eurozone M3 Money Supply falls 0.1% on year ago

Posted: 31 May 2010 01:03 AM PDT

Eurozone M3 Money Supply came in at -0.1%, slightly stronger than the -0.2% expected and inline with its prior reading. Eurozone M3 averaged a fall of 0.2% in 3 months through April.

Eur/Usd trades at 1.2310 in very quiet trading.

Trichet Speaks

Posted: 31 May 2010 01:02 AM PDT

Speaking in Vienna, ECB President Jean-Claude Trichet made the following statements:

  • ECB is “fully independent”.
  • ECB “sticks” to principles of strict treaty.
  • Bond purchases ensure a proper policy transmission.
  • ECB expects “strict respect” for budget discipline.
  • Gov’t bond market is “central” to policy transmission.
  • Bond purchases aren’t quantitative easing.
  • Purchases focus on markets affected by disruptions.
  • Spreads widened early may be beyond  a reasonable level.
  • Inflation expectations remain well anchored.
  • ECB is not breaching a rule on monetary financing.
  • Exceptional intervention was necessary.
  • Calls on governments to work together on surveillance.
  • “We are not printing money”.
  • Governments must ensure fiscal sustainability.
  • ECB is “permanently alert, always prepared to act”.
  • ECB won’t tolerate budget indiscipline any longer.

Nowotny speaks in Vienna

Posted: 31 May 2010 12:21 AM PDT

ECB’s Nowotny speaks in Vienna;

* Central banks can’t solve solvency crisi

* Greece shows that crisis is far from over

* European public finances face significant challenges

* Central banks can’t prevent speculative bubbles

* Ecb is “fiercely independent” and is “inflexibly attached” to price stability

Japan Housing Starts

Posted: 30 May 2010 10:05 PM PDT

Japan Housing Starts y/y came in at 0.6%, weaker than the 6.6% expected, but stronger than the prior reading of -2.4%.

This is a seemingly poor number for the Jpy.

The JPY has been methodically trading weaker against the majors during the session as Usd/Jpy trades at its high of 91.52, Eur/Jpy just off its high at 112.68, and Gbp/jpy also just off its high at 132.45.

Shirakawa on the wires..

Posted: 30 May 2010 09:42 PM PDT

The following are remarks made during a speech in Tokyo:

  • Greece could be a threat if the situation worsens.
  • Japan is making progress toward sustainable growth.
  • Mindful of upside and downside risks.
  • Japan’s economy is in a mild recovery led by exports.
  • BOJ will maintain an extremely accommodative policy.
  • Governments need to maintain fiscal trust.
  • Raising potential growth rate is key for Japan.
  • European turmoil was a wake up call for governments.
  • Lending program shouldn’t interfere with the BOJ.
  • We must not pay too much attention to short term prices.
  • Bigger balance sheet won’t solve deflation.
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