- German April PPI -1.4% m/m, -2.7% y/y vs -0.7% m/m and -0.5% y/y in March. Much weaker than expected vs median forecasts of -0.2% m/m, -1.4% respectively. Sharpest y/y decline since June 1987
- BOJ Gov Shirakawa: Expects consumption and investment to remain weak. Sees current monetary policy as most appropriate for Japan economy
- Italian March industry orders adj -2.7% m/m, -26.0% y/y
- BOE minutes: Voted unanimously 9-0 to keep rates at 0.5% and extend QE programme by £50 bln in May. Some discussion whether to go by £50bln or £75 bln
- Swiss ZEW investor sentiment -3.9% in May after -27.7% in April
- Russia C.Bank Ulyukayev: Dollar remains top currency in forex reserves, euro at slightly over 40%
- BUBA May report: German annual CPI to turn negative in coming months owing to lower energy, food prices
- UK CBI manufacturing order book balance -56 in May vs -57 in April. Worse than median forecast of -50. But output expectations balance -17 vs -32 in April, highest since September 08
Risk sentiment is in pretty good shape; stocks, oil, copper all doing ok. Sentiment will have been underpinned by BofA’s ability to raise over $13 bln in new equity capital. Dollar index slumping.
EUR/USD has put on about 70 points. Decent buying interest seen from Russia and Middle East. Reports of sell orders lined up at 1.3670 up through 1.3700 so far absorbing buying pressure. Buy stops seen just above 1.3700.
Cable has had a choppy morning, An early rally over 1.5500 saw a session high 1.5536 posted before experiencing a fairly sharp reversal. News that the BOE had thought about doing even greater QE at its last meet, although already known, probably didn’t help matters, There was also some disappointment that the CBI manufacturing order book balance came in worse than expected (see above.) We’re presently at 1.5495, marginally firmer on the day.
