- Chain store sales show first rise in six months
- Pimco’s El Erian: Sees overseas investment attractive as dollar to depreciate long-term
- US trade deficit widens for the first time in eight months to $27.6 bln from $26.1 in February
- UK NIESR: UK GDP slide leveling off
- UK claimant count lower than expected, +57k, unemployment rate 7.1%
- Fitch lowers Greece outlook to negative
- IBD/TIPP economic optimism survey 48.6 in April from 49.1 in April
- ECB’s Weber: No need for further bond buys; economy won’t grow until second half of 2010.
- US reports $21 bln April budget deficit; last April’s surplus was $ 158 bln.
- ECB’s Srmako: Sees growth second half of 2009
- SNB’s Jordan: UBS needs to shrink balance sheet; must study non-conventional measures before changing. Growth to resume mid-2010, be weak.
- Japanese opposition Democratic Party of Japan says would not buy US dollar denominated Treasuries if they win general election.
- Oil breaks $60 intraday; closes at $58.50.
- S&P closes down 0.1%; swings in roughly 2% range either side of flat.
EUR/USD managed to extend recent gains in New York morning trading, reaching 1.3706 before giving ground. Asian and BIS selling was seen from the 1.3660 level on up to the highs. Comments from Mohammed El Erian of Pimco on the likelihood of long-term dollar depreciation, helped underpin the move as did upbeat chain stores sales data and the first rise in the US trade gap in eight months (the wider gap assumes US consumption is rebounding). The market absorbed very significant selling on the move to new highs and suffered a case of indigestion late in the European session. Prices slipped back after Weber repeated the shoots don’t look so green to him. US equities slumped about 1% at midday, helping EUR/USD fall back to 1.3585/90 after triggering stops below the 1.3620 level. 1.3555/65 remains pivotal support for EUR/USD near-term.
USD/CHF fell to 1.1005, just avoiding triggering a 1.10 exotic option. Prices rebounded sharply after 1.10 held its ground, reaching 1.1090. Stops lie in the 1.1110 area, dealers report.
AUD/USD saw selling from a US investment bank today and did not participate in the reflation trade on US shores today.
Cable rallies into an important zone of resistance at 1.5350/1.5370 (from early January) today and quickly scuttled lower once the momentum flagged. Upward of 2 yards of EUR/GBP were sold by a German bank this morning, helping keep a solid bid under cable all morning. Upbeat RICS, BRC, trade data and slower deterioration in industrial production and GDP all helped underpin the pound which ended the day at 1.5275.
