Forex Market Updates & Commentary

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• ECB’s Bini Smaghi on the Wires
• Housing Market Index Lower Than Expectations
• Austrian Finance Minister Fekter Comments on Greece
• Irelands Noonan on the Wires
• US Empire Manufacturing Lower & Canada Manufacturing Sales Rise
• US Empire Manufacturing Figures at 8:30AM
• Canada Manufacturing Sales Data due at 8:30AM
• Euro firmer after comments that the EU expects finance ministers to support Portugal program.
• Comments from German gov’t spokesman
• ECB’s Nowotny
• Core CPI better, Trade balance worse
• Eurozone CPI and Trade Balance in 15 minutes…
• USD/CHF through our prior target
• Italian trade balance worse than expected
• Japan Finance Minister Noda Comments

ECB’s Bini Smaghi on the Wires Posted: 16 May 2011 07:33 AM PDT Says Extending Greek maturities wont help ECB will do whats needed to tame inflation Inflation may stay above 2% for some months ‘I have a job until 2013′

Housing Market Index Lower Than Expectations Posted: 16 May 2011 07:01 AM PDT NAHB Housing Market Index comes out at 16 one lower than the projected 17 and same as the prior number. EUR/USD trading very slightly higher on the news.

Austrian Finance Minister Fekter Comments on Greece Posted: 16 May 2011 06:10 AM PDT Says: Greece must make structural reforms Austria would back extended Greek repayment terms Greece should privatize first, then seek aid June Greek disbursment depends on Greek reforms

Irelands Noonan on the Wires Posted: 16 May 2011 06:02 AM PDT Says: Not looking to reschedule Ireland debt There will be no advance today on interest rate Ireland sees no other ECB candidates besides Draghi

US Empire Manufacturing Lower & Canada Manufacturing Sales Rise Posted: 16 May 2011 05:33 AM PDT US Empire Manufacturing:    Survey: 19.65   Actual: 11.90   Prior: 21.70   May vs April                                          Decrease     No. Change    Increasee     Diff. Index Price Paid:                       0.0                   30.1                 69.9                  69.9    Prices Received:           5.4                    61.3                 33.3                  28.0 New Orders:                   17.0                  48.7                34.2                  17.2   Shipments:                     9.8                      54.6               35.6                   25.8     Unfilled Orders:           16.1                     58.1               25.8                   9.7    Delivery Time:              9.7                      78.5               11.8                   2.2    Inventories:                  17.2                    54.8                28.0                10.8   Employees:                    7.5                      60.2               32.3                 24.7  Average Workweek:   5.4                      65.6                29.0                 23.7    Canada Manufacturing Sales:  Survey: 1.8%   Actual: 1.9%  Prior: -1.5%  Revised: -1.8

US Empire Manufacturing Figures at 8:30AM Posted: 16 May 2011 04:27 AM PDT

Canada Manufacturing Sales Data due at 8:30AM Posted: 16 May 2011 04:22 AM PDT

Euro firmer after comments that the EU expects finance ministers to support Portugal program. Posted: 16 May 2011 03:27 AM PDT Expects Greece to deliver on implementing budget program. Says it is making important efforts to ease Greek loan maturities and rates. Debt restructuring not in the cards for Greece. Says no such thing as “soft restructuring”.

Comments from German gov’t spokesman Posted: 16 May 2011 03:02 AM PDT Government sticks to its position of support for Draghi for ECB. Discussions over possible successor of IMF chief are not appropriate. IMF will be able to play full role in Eurozone crisis. Strauss-Kahn remains innocent until proven guilty. Sees no hole in Greece policy with IFM chief arrested. There are arguments for a good European candidate for top IMF job. Europe ahs no automatic right to IMF chief position.

ECB’s Nowotny Posted: 16 May 2011 02:05 AM PDT Strauss-Kan arrest will not affect IMF role in Europe. Ecofin wil find a stable Greece solution. Strauss-Kahn played an important role, hopes clear IMF leadership solution is found soon. No Greece solution until report is presented. Sees lower inflation in 2012; 2% or lower.

Core CPI better, Trade balance worse Posted: 16 May 2011 02:02 AM PDT CPI (y/y) came in at 2.8% as expected. Core CPI was 1.6%, better. Trade balance -0.9B, worse. EUR slightly lower on the release.

Eurozone CPI and Trade Balance in 15 minutes… Posted: 16 May 2011 01:45 AM PDT

USD/CHF through our prior target Posted: 16 May 2011 01:09 AM PDT We said before that it looked like .8889 was our downward target. The pair has moved through that level; continued momentum could see the pair advance towards the 38.2% retracement line.

Italian trade balance worse than expected Posted: 16 May 2011 01:05 AM PDT The monthly reading came in at -3.943B versus the -2.29B  forecast and -3.63B prior reading The market had a limited reaction to the release.

Japan Finance Minister Noda Comments Posted: 16 May 2011 12:46 AM PDT Next few weeks will be crucial for implementing EU’s Greek rescue plan. G7 intervention in March shows JPY stability is crucial for EUR stability. Hopes Japanese purchase of ESFS bonds will help stabilize the euro. Reversing currency integration would cause big costs for Europe.

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