When all said and done, there has been little real change overnight in Asia. EUR/USD sits at 1.3025 having closed out Wednesday in North America around 1.3000, while EUR/JPY is up around 127.60 from 127.25. Cable has managed to put on about 1/2 a point, steadying a little after yesterdays poorly-received Budget.
A couple of major uncertainties continue to overhang the market. Firstly the results of the US bank stress tests and secondly the fate of the major US automakers.
Reports have it that the US banks will be briefed by regulators as early as Friday on how they performed in the stress tests before results are made public later.
Meanwhile US Treasury has apparently asked Chrysler LLC’s secured lenders to reduce their debt to $1.5 bln from $6.9 bln in exchange for a 5% equity stake in the automaker. The offer comes after a proposal by the lenders to reduce the debt to about $4.5 bln and take 40%. To say the two sides are poles apart is something of an understatement.
The Government deadline of April 30 fast approaches for Chrysler to cut most of its secured debt, reach cost-saving labour accords and forge an alliance with Fiat.
European data for release today:
06:45 GMT: French business confidence indicator (April) expected 69
07:00 GMT: French PMI (April-prov) manufacturing expected 37.0, services 43.7
07:30 GMT: German PMI (April) manufacturing expected 33.0, services 42.4
08:00 GMT: Euro zone current account (Feb) expected -10.7 euros
08:00 GMT: Euro-zone PMI (April) manufacturing expected 34.7, services 41.4, composite 38.9
09:00 GMT: Swiss ZEW survey (expectations) (April)
09:00 GMT: Euro zone industrial new orders (February) expected -2,2% m/m, -34.8% y/y
10:00 GMT: UK CBI industrial trends total orders
