Forex Market Updates & Commentary

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• EURUSD is approaching some resistance levels in choppy session
• EU Rehn says Portugal package to be in place in matter of weeks
• Fed’s Duke and Kocherlakota exchange comments on the newswires
• Kocherlakota will not discuss monetary policy in his speech
• Feds Duke speaks about small businesses
• ECB Wellink says challenges are huge in certain countries
• Geithner budget dominant policy challenge
• Jobless Claims Soar Higher & Core PPI Data higher than expected
• Initial Claims worse. Seasonals blamed
• The NY Opening Forex Commentary is available for viewing
• Bobbys Corner-Open Market-April.14.2011
• US Jobless Claims & Producer Price Index Data due at 8:30AM
• GBP/JPY finding hourly support near 135.70
• Swiss ZEW for April: 8.8 versus the -13.5 prior reading.
• Greek 10 year bond yields rise above 13% for the first time.

EURUSD is approaching some resistance levels in choppy session Posted: 14 Apr 2011 07:15 AM PDT The 100 and 200 bar MA on the 5 minute chart is at 1.4443 currently The 100 hour MA currently comes in at the 1.4453 level.  If you are inclined to sell the EURUSD or take some profit, this level should provide some resistance.

EU Rehn says Portugal package to be in place in matter of weeks Posted: 14 Apr 2011 06:51 AM PDT Also comments that the Euro area will emerge from crisis stronger than before. Immediate action needed in EURO region to cut debt

Fed’s Duke and Kocherlakota exchange comments on the newswires Posted: 14 Apr 2011 06:42 AM PDT Duke: Fed has a number of tools to reduce balance sheet Markets will be able to absorb end of Fed purchases (this is still up in the air) QE2 impact on interest rates have already been absorbed Fed would act if Inflation is sustained Fed will do its job to keep inflation stable Kocherlakota: The Fed will eventually sell off assets If the Fed does not raise rates fast enough the US will have inflation 1st round of QE reduced longer term yields (no comments on the 2nd round. It actually started a move to the upside) Does not see much signs of inflation Core inflation is very low right now Japan to have relatively muted US impact

Kocherlakota will not discuss monetary policy in his speech Posted: 14 Apr 2011 06:16 AM PDT

Feds Duke speaks about small businesses Posted: 14 Apr 2011 06:04 AM PDT Says small business owners have become more optimistic on outlook for sales and that credit conditions have improved. Nevertheless, the weaker initial claims and the higher core inflation has the dollar moving back down. The focus earlier was on the weaker EURO and higher bond yields in Greece and Portugal. Now the focus is back on a lower dollar.

ECB Wellink says challenges are huge in certain countries Posted: 14 Apr 2011 05:58 AM PDT Adds that signs of lessons of crisis beginning to fade.   Does that last comment suggest apathy to the remedies for improvement (i.e., cut spending/live within budgets)? The bond yields within Greece and Portugal continue to rise and debate of debt restructuring continues. The market has an eye on Spain as if it starts to come under pressure, it should spell trouble for the Euro.  In the chart below the Greece and Portugal yields continue to rise. The Spain yield is still moving sideways.

Geithner budget dominant policy challenge Posted: 14 Apr 2011 05:40 AM PDT Need to shift focus to financial reform Need for multi year program Urges to start now on budget Need to lock in a set of reforms Confidence in markets for US fiscal position He thinks that the world sees US problems as more manageable The comments are nothing new.  It is one thing to say, another to do.

Jobless Claims Soar Higher & Core PPI Data higher than expected Posted: 14 Apr 2011 05:33 AM PDT Jobless Claims:  Survey:  380K    Actual: 412K   Prior: 382K    Revised:  385K    Continuing Claims:  Survey: 3705K    Actual:  3680K    Prior: 3723K  Revised: 3738K Producer Price Index (MoM):     Survey: 1.0%    Actual: 0.7%       Prior: 1.6%   PPI Ex Food & Energy (MoM):    Survey: 0.2%    Actual: 0.3 %       Prior: 0.2%    Producer Price Index (YoY):     Survey:  6.1%    Actual: 5.8%      Prior: 5.6%     PPI Ex Food & Energy (YoY):     Survey: 1.9%    Actual: 1.9%     Prior: 1.8%

Initial Claims worse. Seasonals blamed Posted: 14 Apr 2011 05:31 AM PDT Initial Claims: 412 vs 380 K expectations. Revision 385K vs 382K Continuing Claims: 3680K vs 3705K E Seasonal factors cited for the rise PPI less than expectations at 0.7% The Ex Food and energy a touch higher than expectations at 0.3% vs 0.2%. The USDJPY fell on the news and made new lows. There is channel support at the 82.92 level

The NY Opening Forex Commentary is available for viewing Posted: 14 Apr 2011 05:10 AM PDT

Bobbys Corner-Open Market-April.14.2011 Posted: 14 Apr 2011 05:08 AM PDT Good Morning: Portugal and Greek bonds dropped overnight-pushing yields to record highs.  The Euro took it on the chin, as sovereign debt concerns take center stage again. The spread between Greek/German 10 year bonds widened to over 1,000 basis points.  We have not seen this wide a spread since May 2010. News that Finland may block a Portuguese bailout also added to the Euros drop. This news may cause doubt within the markets that the EU can ensure  financial stability within the region. ECB officials have made it clear to the markets that monetary policy “is still very accomodative”, and that liquidity is ample.  The JPY rose as investors look for a safe haven as equity markets dropped overnight. US Futures are also lower at this time-pointing to a lower opening on Wall Street this morning. In North America-all eyes will be on the US inflation report with PPI at 8:30 AM, along with jobless claims.   Oil:106.56                                                              Gold:$1456.70  TIME FOR EST. PRIOR 8:30A.M. INITIAL CLAIMS 9-Apr 380K 382K 8:30A.M. CONTIUING CLAIMS 2-Apr 3703K 3723K 8:30A.M. PPI MoM     MAR. 1.00% 1.60% 8:30A.M. PPI EX FOOD & ENERGY MoM MAR. 0.20% 0.20% 8:30A.M. PPI YoY MAR. 6.10% 5.60% 8:30A.M. PPI EX FOOD & ENERGY YoY MAR. 1.90% 1.80% HAVE A GREAT DAY & GOOD LUCK

US Jobless Claims & Producer Price Index Data due at 8:30AM Posted: 14 Apr 2011 04:47 AM PDT

GBP/JPY finding hourly support near 135.70 Posted: 14 Apr 2011 02:59 AM PDT Sterling is lower across the board (along with the euro) as we await the arrival of U.S. markets. Seen below, the GBP/JPY pair has tested 135.70 multiple times since yesterday but has not been able to secure a close below (which could signal further bearish movement). Also note trendline resistance which appears to be developing.

Swiss ZEW for April: 8.8 versus the -13.5 prior reading. Posted: 14 Apr 2011 02:02 AM PDT The CHF advanced against all of the majors.

Greek 10 year bond yields rise above 13% for the first time. Posted: 14 Apr 2011 01:41 AM PDT

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