The NY session witnessed some very mixed price action as better economic data could not calm fears about more financial woes and swine flu concerns continued to lurk. US consumer confidence jumped to a much higher than expected 39.2 in April from 26.9 prior. The expectations component also showed a marked improvement and this bodes well for consumer spending going forward. News that two major US banks will need more capital (one estimated as needing $50 billion or more) and some new cases of swine flu kept risk trades at bay, however. US equities shed -0.27% after spending most of the session moving in and out of positive terrain. Gold was lower and near the middle of the 884/907 range ostensibly on some heavy gold ETF selling in the eurozone.

Euro caught a bid as the debate about quantitative easing continues. ECB member Bini Smaghi was the latest to chime in and his comments seemed to suggest he does not favor heading down the path to QE. He noted in a speech that policy makers ''should be wary of the possible side-effects of unconventional measures and, in particular, of any impact on the financial soundness of the central bank's balance sheet and of preventing a return to a normal market functioning''. The seemingly lack of conviction amongst ECB members regarding QE sent EUR/USD rocketing more than 150 pips in the NY session – less intervention means less currency depreciation. The high was 1.3167 and right at the top of the Ichimoku cloud. This level now shifts to 1.3192 in the upcoming sessions and will likely be closely watched as a key trigger to continued upside here.

New Zealand economic data will dominate the Asia session now. New Zealand trade is expected to improve to a deficit of -4.9 billion from -5.2 billion. Business confidence for April is also due out. While there is no consensus estimate, we would expect an improvement from the -39.3 March read to be NZD positive. Kiwi should find resistance into the 0.5618/32 area as multiple hourly moving averages lurk there. We would expect a test of the hourly down-trendline by 0.5660 if above. 0.5570 and 0.5530 should be good levels of support on any weak tone to the economic reports.

Upcoming Economic Data Releases (Asia Session) prior expected

  • 4/28 22:45 GMT NZ  Trade Balance  MAR  489.0M  250.0M
  • 4/28 22:45 GMT NZ  Imports  MAR  2.97B  3.34B
  • 4/28 22:45 GMT NZ  Exports  MAR  3.46B  3.55B
  • 4/28 22:45 GMT NZ  Trade balance for full year  MAR  -5161  -4893
  • 4/29 3:00 GMT NZ  NBNZ Business Confidence  APR  -39.3  - -