April 5th, 2011 23:38:14 GMT.

AUD momentum starting to wane

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I’m certainly not brave enough to call a turn in the AUD as it’s bitten me too many times in the past but it does seem that the recent bullish momentum is beginning to wane. The AUD/USD struggled yesterday while the cable was rallying hard and AUD/JPY backed off 88.00 immediately without making a really strong push to get through.

Bids are still being reported in the AUD/USD around 1.0250/70 but rallies are also likely to meet with supply, from cross traders primarily.

2011-04-05T23:38:14+0000

April 5th, 2011 23:15:31 GMT.

UK Data: Jobs Growth Slows, Wage Inflation Picks Up: KPMG/REC

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–KPMG/REC: UK Mar Permanent Placements 59.7 Vs 62.7 In Feb
–KPMG/REC: UK Mar Vacancies Index 60.8 Vs 60.4 In Feb
–KPMG/REC: UK Mar Temporary Staff Billings 58.8 Vs 61.5 Feb
–KPMG/REC: UK Mar Permanent Salaries 55.3 Vs 53.7 Feb

LONDON (MNI) – UK permanent and temporary job placements grew at a
slower pace in March but wage inflation picked up with permanent
salaries rising at their fastest rate in eight months, according to the
latest KPMG/REC survey of the UK labour market.

The survey, compiled by Markit Economics, showed that despite the
rise in permanent salaries wage growth was still running below its long
run average, while vacancies continued to increase and growth in staff
availability slowed.

The permanent staff placements index fell to 59.7, down from
February’s 10-month high of 62.7.

Temporary and contract billings pulled back to 58.8 from
February’s 61.5.

Jack Kennedy, Senior Economist at Markit Economics, told Market
News International: “The slowdown in growth of recruitment activity
during March was attributed by consultants to a sense of uncertainty
creeping into the market, in turn reflecting concerns over the economic
outlook and impact of public sector spending cuts.”

“Nevertheless, both permanent and temporary jobs still rose at
robust rates, while overall vacancy levels increased at the fastest pace
for almost a year, so the overall picture remains relatively positive,”
he added.

The KPMG/REC survey showed the fastest rise in permanent salaries
in eight months, though at 55.3 it was slightly below the survey’s
average. Permanent salaries were last higher in July 2010, when the
index stood at 56.1.

Temporary staff pay rates fell to 52.6, slightly below February’s
52.7.

“Although permanent salaries rose at the sharpest rate for eight
months in March, this measure remained slightly below its long-run
average, and is historically consistent with annual earnings growth
below the 4% rate likely to worry the Bank of England over
‘second-round’ inflation effects taking hold,” Kennedy said.

Permanent staff vacancies rose to their highest level in just under
a year – climbing to 60.9 from 60.4 in February.

Temporary and contract staff vacancies advanced to 59.8, the
highest level since July 2007 when it was 60.1.

Permanent staff availability fell from February’s 51.5 to 50.3. The
availability of temporary staff fell to 53.9 in March from 57.0 in
February, which is its lowest level since August 2010.

Kevin Green, Chief Executive of the Recruitment and Employment
Confederation, said in the press release: “The jobs market is still
growing but at a slower rate than in February. The report again
highlights that the UK has a two-speed labour market with the private
sector creating jobs as the public sector reduces employment.”

–London newsroom: 4420 7862 7492; email sanjukta.moorthy@ntkn.com
email ukeditorial@marketnews.com

[TOPICS: M$B$$$,MABDA$,MABDS$]

2011-04-05T23:15:31+0000

April 5th, 2011 23:15:30 GMT.

UK Mar Shop Price Inflation Eases Slightly: BRC

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–UK BRC Mar Shop Prices Up 2.4% y/y Versus up 2.7% y/y Feb
–UK BRC Mar Food Prices Up 4.0% y/y; Non-Food Up 4.5% y/y
–UK BRC Mar Non-Food Prices Up 1.5% y/y; Non-Food up 1.6% y/y

LONDON (MNI) – Shop price inflation eased a little in March, having
hit its highest level since November 2008 in February, according to the
British Retail Consortium-Nielsen Shop Price Index (SPI).

Despite a slight easing in the pace of costs, the BRC survey shows
the SPI remains several percentage points above the BOE’s 2.0% inflation
target, coming in at 2.4% on the year in March, down from 2.7% in
February.

And the BRC warned that the recent surge in oil prices and
uncertainty surrounding supply will continue to put upward pressure on
prices over the coming months.

But an increased number of price-cutting promotions appear to have
tempered the pass-through effects of rising global commodity prices on
inflation in March, the BRC said.

The BRC data showed shop prices fell O.3% on the month in March,
following a VAT-hike fuelled 0.7% rise in February. Food prices were up
4.0% on the year while non-food prices rose 1.5%.

On a monthly basis non-food prices slipped 0.2% while food prices
dropped 0.5%, despite continued upward pressure from commodity prices.

“Global commodities are still exerting considerable upward pressure
on retailers’ costs, but a greater intensity of promotions has led to a
fall in year-on-year food inflation which will come as a great relief to
hard-pressed families,” Stephen Robertson, British Retail Consortium
Director General, said.

“Over the shorter term, food was actually cheaper in March than
February. It’s a clear demonstration of competition in the retail sector
keeping costs down for shoppers. The proportion of groceries going
through the tills on promotion has reached a new all-time high of 40%,”
he said.

“The consistently low rate of inflation for non-food goods shows
retailers are still absorbing much of the VAT rise themselves.”

Economists at JP Morgan said in a recent note that the BRC shop
price data provide only “a very imperfect guide” to the official
consumer price outturns, although there is co-movement between food and
non-food components of the SPI and the official data outturns for these
sectors.

–London newsroom: +44 20 7 862 7492; email: wwilkes@marketnews.com

[TOPICS: M$B$$$,MABDS$,MT$$$$]

2011-04-05T23:15:30+0000
2011-04-05T23:07:32+0000

April 5th, 2011 22:25:34 GMT.

AUD/JPY touching resistance levels

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The break above 85.00 saw some stops triggered in USD/JPY, in fairly illiquid trading conditions. The JPY crosses have also gotten a leg higher and one big level to watch is in AUD/JPY at 88.00, which was the 2010 high.

There are certain to be stop-loss buy orders from momentum funds and trend following CTAs on a clean break above there.

2011-04-05T22:25:34+0000

April 5th, 2011 22:20:05 GMT.

Oil, Gold, Silver: All impacting on FX market

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The ‘logic’ regarding the oil price is that the big Middle Eastern players are diversifying their petro-dollars into EUR in particular. They had been buying CHF in massive quantities but I guess there’s a limit to how much of a relatively small currency one can buy. With the oil price increasing sharply, the amounts of EUR/USD to be bought increases accordingly.

There’s a bit of a ‘chicken-and-egg’ situation when it comes to the relationship between precious metals and the USD; is it the weakening USD which is driving demand in PMs or is it the other way around? Whatever, as long as the strong uptrend continues in Gold and Silver, the FX market will not be comfortable buying USD.

2011-04-05T22:20:05+0000
2011-04-05T21:43:19+0000

April 5th, 2011 21:32:03 GMT.

Cable: Beware of the nasty ‘clean-out’ rally

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Sterling trades like no other currency. The market loves to hate it, loves to sell it, then occasionally gets caught short and we see nasty clean-out rallies.

I’m long and I’m biased. I’m long because I think the GBP is heavily undervalued against the JPY in particular but also against the EUR. The market is in a long-term USD-selling mode so I’m comfortable trading this sterling view in the cable. If the market gets caught short sterling across the board and has to cover quickly, we’ll see a 10 big figure move very quickly.

It’s difficult to advise going long cable at 1.63, which is at the upper end of recent trading ranges, but I think anyone trying to fade the rally should also be very careful. If we break clearly above 1.6400 then the clean-out could well begin in earnest.

2011-04-05T21:32:03+0000

April 5th, 2011 21:08:31 GMT.

EUR/USD outlook: Still more likely to go up rather than down

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EUR/USD opens this morning at the same level as yesterday and the demand on dips continues to astound the bears. The EUR crosses had a mixed night with EUR/JPY breaking above psychological resistance at 120, EUR/CHF also rallying again but EUR/GBP turning sharply lower.

There is major technical resistance in EUR/USD at 1.4280 and talk of barrier options at 1.4275 and 1.4300 but it’s not trading like a pair that’s about to end it’s recent uptrend. I think we may see another test of these resistance levels, more likely during the London session than in Asian trade.

2011-04-05T21:08:31+0000

April 5th, 2011 21:05:41 GMT.

US Rep.Ryan: New Budget Proposal Wld Lead to Paying Off Debt

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By Katie Schimmelpfennig

WASHINGTON (MNI) – House Budget Committee Chair Paul Ryan released
a budget proposal for the current fiscal year Tuesday that he said will
actually put the country in a position to pay off debt.

“Our budget is very, very different. First of all, it cuts $6.2
trillion in spending from the president’s budget over just the next 10
years,” Ryan said in a speech at American Enterprise Institute, a think
tank generally regarded as moderately conservative.

The plan “puts the nation on a path that will actually pay off our
debt and it lowers the debt as a percentage of the economy, now until we
pay it off,” he said.

In the first 10 years this budget would reduce the deficits by $4.4
trillion, he said.

In contrast, Ryan said, “The president’s recent budget proposal, it
would accelerate America decent into a debt crises. It doubles the debt
held by the public by the end of his first term and triples it by the
end of his budget.”

Congress has until Friday to either agree on a budget, or face
government shutdown when the current stop-gap funding measure expires.
The 2011 fiscal year began Oct. 1, but lawmakers have not been able to
agree on a budget so the government has run on six short-term funding
bills.

“The path to prosperity is the budget we’re offering today,” Ryan
said.

The four major parts of his reform include: a more efficient and
effective government, builds on state led welfare, has more retirement
security and reforms the tax code for job creation and economic growth,
he said.

The budget should not be a political weapon. Congress needs to work
together to make a budget to avoid an economic crisis, he said.

“This is the most predictable economic crisis we’ve ever had in
this country,” Ryan said. “For too long policy makers from both
political parties in Washington have traveled a path a least resistance,
easy promises and empty claims of progress, relentless spending and
constant borrowing, this path have left us on a brink of national
bankruptcy.”

Ryan has received mixed feedback.

The White House said in a statement that “Ryan’s plan fails” to
“reflect the American values of fairness and shared sacrifice.”

Maya MacGuineas, president of the Committee for a Responsible
Federal Budget, said in a statement, “This is a bold budget, and
Congressman Ryan should be congratulated for putting forward structural
budget reforms to address our unsustainable debt path.”

Peter G. Peterson, chair of the Peter G. Peterson Foundation, said
in a statement, “Chairman Ryan deserves significant credit for looking
beyond the current fiscal year and leading an effort to put forward a
budget proposal that addresses many of the drivers of our long-term
debt.”

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

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

2011-04-05T21:05:41+0000
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