Forex News | Currency News by Forexlive

With the markets already thin at month-end and owing to the failure of London to bother to show up for work today, markets are fairly whippy. We’re seeing a minor bounce in the dollar across the board as traders lighten up on positions.

Look for some volatility around the 15:00 GMT month-end fixing followed by a quiet afternoon.

1.4825 is minor support on dips for EUR/USD, while 81.65 is pretty firm resistance. Look for some stops above the 81.70 level.

Germany’s Bild tabloid endorsed Bank of Italy chief Draghi, helping ease his path toward the top-spot at the ECB in Frankfurt. His qualifications for the job? He used to work at Goldman, of course…

FRANKFURT (MNI) – The European Central Bank said Friday that it
will require information to be reported on a loan-by-loan basis for
commercial mortgage-backed securities accepted as collateral in
Eurosystem refinancing operations.

A verbatim text of the ECB’s statement is below:

“Following the general decision announced on 16 December 2010 to
establish loan-by-loan information requirements for asset-backed
securities (ABSs) in the Eurosystem collateral framework, the Governing
Council of the European Central Bank (ECB) intends to introduce these
requirements for commercial mortgage-backed securities (CMBSs) and
small- and medium-size enterprise (SME) transactions accepted in the
Eurosystem collateral framework within the next 18 months.

Loan-level data for these asset classes will be provided in
accordance with the templates available on the ECB’s website at least on
a quarterly basis on, or within one month of, the interest payment date
of the instrument in question.

The Eurosystem will continue to accept securities not meeting the
new information requirements until the obligation to submit loan-level
data comes into force. Further details on the ECB’s initiative regarding
loan-by-loan information requirements for ABSs are available on the
ECB’s website.”

The ECB’s website is: www.ecb.int.

[TOPICS: M$$EC$,M$X$$$,MGX$$$]

US DATA: BLS says there were no strikers in the Apr payroll survey pd.

With much of Europe closed on Monday for May Day, those pushing for a Greek debt restructuring have taken their feet off the accelerator a bit. Greek credit default swaps have narrowed, now about 1350 bp from well above 1400 bp earlier in the week.

Spanish spreads over bunds are tighter as well, by about 7 bp to 209 bp over. Spain had appalling employment and retail sales data this morning.

Anything that takes pressure off the periphery in Europe is a plus to the euro, as if it needs it…

We consolidate now in the 1.4866 area.

PARIS (MNI) – The European Commission said Friday it has initiated
two antitrust investigations into the behavior of sixteen U.S. and
European investment banks active in the credit default swaps (CDS)
market.

The first case will examine whether the sixteen banks, along with
leading financial information provider Markit, “have colluded and/or may
hold and abuse a dominant position in order to control the financial
information on CDS.” Such behavior, “if proven,” would violate the
European Union’s anti-trust rules, the Commission said.

The second case will look at the relationship between nine of the
banks and ICE Clear Europe, which is the leading clearing house for CDS.
In particular, the Commission wants to determine whether preferential
tariffs granted by ICE to the nine banks have the effect of “locking
them in the ICE system” to the detriment of competing clearers.

CDS gained considerable notoriety during the financial crisis
because they were used to speculate against some large institutions and
later against Greece in the early days of the Eurozone’s sovereign debt
turmoil.

CDS are meant to protect investors in case a company or a sovereign
government in which they have invested defaults on its payments. But
they are also used as speculative instruments.

“CDS play a useful role for financial markets and for the economy,”
the Commission said in a written statement. “Recent developments have
shown, however, that the trading of this asset class suffers a number of
inefficiencies that cannot be solved through regulation alone. We are
therefore opening two new cases to improve market transparency and
fairness in the CDS market.”

The sixteen banks being targeted in the CDS probe are: JP Morgan,
Bank of America Merrill Lynch, Barclays, BNP Paribas, Citigroup,
Commerzbank, Credit Suisse First Boston, Deutsche Bank, Goldman Sachs,
HSBC, Morgan Stanley, Royal Bank of Scotland, UBS, Wells Fargo
Bank/Wachovia, Credit Agricole, and Societe Generale.

The probe will also examine the license and distribution agreements
of Markit, a UK-based company created originally to enhance transparency
in the CDS market. Markit is also known for the purchasing managers’
index (PMI), a widely watched forward-looking economic indicator in many
major economies of the world.

“The Commission is now concerned certain clauses in Markit’s
licence and distribution agreements could be abusive and impede the
development of competition in the market for the provision of CDS
information,” the Commission said.

[TOPICS: M$X$$$,MGX$$$,M$$CR$]

By Brai Odion-Esene and Ian McKendry

WASHINGTON (MNI) – Compensation costs for civilian workers —
excluding federal workers — increased slightly by 0.6% seasonally
adjusted for the first quarter, with state and local governments lagging
behind private industry, the Bureau of Labor Statistics reported Friday.

For the 12-month period ending March 2011, the Employment Cost
Index rose by 2.0%, the same rate of growth seen in the fourth quarter
of last year.

Overall wages and salaries rose 0.4% in the latest quarter, the
same pace reported in the fourth quarter. The 1.6% increase over the
year matched the +1.6% reported for the fourth quarter.

Overall benefits costs rose to 1.1% in the first quarter, forging
ahead of the +0.5% pace set in the previous quarter, and a 3.0% increase
in a year. That annual gain was above the 2.9% increase in a year
through the third quarter.

Expectations in a Market News International survey of economists
was for the Employment Cost Index to rise by 0.5% in Q1, with responses
ranging from +0.4% to +0.6%.

The fourth quarter’s increase of 0.4% remained unchanged because
the ECI report’s numbers are never revised due to there being no more
accurate subsequent data for this series.

The report also does not cover federal workers, due to a decision
made when the series was inaugurated by BLS to use existing budget money
to perfect the non-federal portion of the survey. And the report
measures only compensation per hour, so any cutback in hours overall —
something that characterizes the post-crisis jobs market — is not
reflected.

The first quarter results for private industry alone showed total
compensation up 0.5% vs. +0.5% in the fourth quarter and a 2.0% increase
from the previous year. Private industry benefits rose 1.2%, exceeding
by a significant margin the 0.5% rise in Q4, with a 3.0% increase over
the year.

Within that, the BLS noted the pace of growth in employer costs for
health benefits moderated in Q1, rising 3.4% for the year vs. +4.5% in
Q1 2010.

Given the fiscal struggles of state and local governments, and the
rise in the number of measures introduced to cut spending, it was no
surprise that the increase in compensation for state and local
government workers was the same for the first quarter compared to the
previous, up 0.5%.

Over a year, state and local government compensation was up 1.8%,
the same rate of increase seen in Q4 and Q3. Wages and salaries rose
+0.4% in Q1 and +1.2 y/y. That annual change was the lowest increase on
record, matching the increases reported for the previous two quarters.

The ECI is based on a sample of about 13,000 private establishments
and about 1,800 state and local government offices coverage a range of
geographic areas.

** Market News International Washington Bureau: 202-371-2121 **

[TOPICS: MAUDS$,M$U$$$]

CANADA DATA: Feb GDP -0.2% vs Jan +0.5%.

–Private Wages +$18b vs +$23.9b in Feb; Savings Rate 5.5%

By Joseph Plocek

WASHINGTON (MNI) – The March Personal Income report gives little
insight for the future, since its results were already incorporated into
the Q1 GDP estimate.

March Personal Income printed +0.5%, Personal Consumption
Expenditures +0.6% and PCE core prices +0.1% for +0.9% over the year.

Private wages advanced $18 billion after an upwardly revised +$23.9
billion in February. Manufacturing payrolls rose and services wages
gained at about half their February pace. Arguably the most interesting
‘new’ information is that wages continue to grow at a good clip.

Supplements, proprietors’ income, rents, income receipts, and
government transfers all rose, adding to a healthy outlook.

The monthly savings rate was 5.5%, the same as in February. Savings
spiked in January after a blow-out Christmas season and then dipped. The
savings rate appears to have downshifted in late 2010 but remains
elevated from pre-recession numbers.

February wages were revised higher and savings down in perhaps one
interesting pattern that suggests a higher propensity to spend as the
economy improves.

Another interesting pattern is seen in monthly real consumption
numbers. Consumers spent heavily on autos in February but then pulled
back on durables buys in March; they also stopped spending on
nondurables in March (-0.3%) as food and energy prices jumped. Thus,
real spending shows a sawtooth pattern, ending Q1 on a lower note that
implies a lack of momentum into Q2.

Even the Commerce Department statement accompanying the data said
there was “nothing unusual” in the March PCE report.

**Market News International Washington Bureau: (202)371-2121**

[TOPICS: MAUDS$,M$U$$$,MT$$$$,MAUDR$]

US DATA: Mar Personal Income +0.5%, PCE +0.6% and PCE core px +0.1%, all
already included in the Q1 GDP computation and thus useless as mkt info.
Pvt wages +$18b vs +$23.9b in Feb, as mfg payrolls rose & services wages
gained at 1/2 the Feb pace. Supplements, proprietors’ income, rents,
income receipts, and transfers rose. Monthly savings rate was 5.5%, the
same as in Feb and still elevated. Real spending sawtooths to a low note
in Mar (+0.2%), implying slow momentum into Q2. Feb wages were revised
higher and savings down in perhaps another interesting pattern. Commerce
Dept. said there was “nothing unusual” in the report.

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