The London session was rather mixed in terms of price action. The weaker than expected Chinese GDP numbers – at 6.1% in 1Q and the lowest run-rate in a decade – saw risk trades come off a touch early on.
Better than expected earnings from another major US investment bank late in the session saw a reversal of fortunes here, however. While the sustainability of these earnings will come into question and whether other less stellar institutions will also beat results is anyone's guess, the news has optimism as once again the flavor of the day.
European bourses are now up a little more than 1.0% across the board and gold has dipped -$2 into the 888/889 area.

While optimism remains relatively intact, the facts on the ground continue to suggest little improvement. Economic data out of the eurozone continued to print extremely negative.
Industrial production plunged at an -18.4% annual rate in February and the worst read since records began back in 1986. We believe that the eurozone remains a touch behind the US in terms of their economic slowdown and that things are likely to get worse before they get better over there. EUR/USD was little changed overall and sitting near the 1.3160/70 London open as some modest USD selling on the better bank earnings kept EUR somewhat supported. 1.3120 and then 1.3090 looks like key levels to watch now.

The news flow was also negative for the recently very bid British pound. Reports that public borrowing in the UK will rise to £175B in the next two years were negative for GBP as estimates had been nearly £10B below that. Cable sank -90 pips as a result towards the 1.4870/80 area while EUR/GBP managed to eke out a 50 pip upmove to 0.8850/60 as well. The yen crosses were initially better bid on the earnings numbers but still have an overall heavy feel to them and USD/JPY and EUR/JPY added a mere 10-15 pips in the session. We would expect good USD/JPY support into 98.50 and 98.20/10 while EUR/JPY 130.00 and then 129.30 look like good barriers as well.

Upcoming Economic Data Releases (NY Session) prior expected

  • 4/16 12:30 GMT CA Manufacturing Shipments MoM FEB -5.40% 3.30%

  • 4/16 12:30 GMT US Housing Starts MAR 583K 540K

  • 4/16 12:30 GMT US Building Permits MAR 547K 549K

  • 4/16 12:30 GMT US Initial Jobless Claims 11-Apr 654K 665K

  • 4/16 12:30 GMT US Continuing Claims 4-Apr 5840K - -

  • 4/16 14:00 GMT US Philadelphia Fed. APR -35 -32.5

  • 4/16 17:00 GMT US Lockhart to Speak on Financial Crisis