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Wakeup Call on Forex Markets

Strong Japanese GDP figures lifting JPY higher

Fri, May 16 2008, 07:40 GMT
by David Karsbøl

Saxo Bank

Stocks looking good from a technical perspective with close at new highs in the S&P500, but we remain bearish and believe that we are close to a turning point.

Overnight News Bullets

• GE GDP QoQ/YoY (1Q P) out at 1.5%/2.6% vs. 0.7%/1.8% expected.

• GE CPI MoM/YoY (Apr F) out at -0.2%/2.4% as expected.

• FR GDP QoQ/YoY (1Q P) out at 0.6%/2.2% vs. 0.5%/2.0% expected.

• NO Trade Balance (Apr) out at 37.4B vs. 39.6B expected.

• E-Z GDP QoQ/YoY (1Q A) out at 0.7%/2.2% vs. 0.5%/1.9% expected.

• E-Z CPI MoM/YoY (1Q A) out at 0.3%/3.3% as expected.

• US Initial Jobless/Continuing Claims out at 371K/3060K vs. 370K/3035K expected.

• CA Manufacturing Shipments MoM (Mar) out at -1.6% vs. -0.4% expected.

• US Empire Manufacturing (May) out at -3.2 vs. 0.0 expected.

• US Total TIC Flows (Mar) out at -$48.2B vs. $67.5B expected.

• US Industrial Production (Apr) out at -0.7% vs. -0.3% expected.

• US Capacity Utilization (Apr) out at 79.7% vs. 80.1% expected.

• US Philly Fed (May) out at -15.6 vs. -19 expected.

• US NAHB Housing Market Index (May) out at 19 vs. 20 expected.

• NZ PPI Inputs/Outputs (1Q) out at 2.3%/1.8%. Vs. 1.3%/1.5% prior.

• JN GDP Annualized (1Q P) out at 3.3% vs. 2.5% expected.

• JN Industrial Production MoM/YoY (Mar F) out at -3.4%/-0.7% vs. -3.1%/-0.4% expected. * JN Consumer Confidence (Apr) out at 35.4 vs. 37.8% expected.

Markets

• FX: USD slightly lower. EURUSD @ 1.55. JPY stronger on GDP figures.

• Fixed income: Rallying. Especially Bunds stronger on German CPI’s and GDP.

• Stocks: Quite boring European session, but US in broadly based rally.

• Commodities: Crude quite volatile, ending slightly higher. Precious metals also higher.

O/N Data Heat map:

Calendar

Today's Highlights:

This and Next Week’s Highlights:

What's going on?

• Following the strong U.S. session, the Asian equities rose for a fifth day, with the regional benchmark attaining 4-month highs. Speculation of Chinese interest in overseas acquisitions of mining companies has spurred the markets.

• Although the U.S. has surprised with some positive figures of late, continuing jobless claims hit a highest level in more than 4 years yesterday, reminding of the fragile state of economy. The probability of a unchanged rates at FOMC’s next rate decision on June 25 as implied from Fed Funds futures has already climbed to 90% from a mere 32% a month ago.

• Today’s U.S. April Housing Starts and Building Permits, due out at 12:30 GMT, will be keenly observed by the markets today. Median surveyed expectations for Housing Starts points to 939K, which is only about 20% above the absolute lows of last 2 decades, recorded in January 1991 at 798K.

FX

Break-Out to the Upside in EURCHF, supported by trend.

FX Trading Strategies

Published on  Fri, May 16 2008, 07:40 GMT

Archive

• Strong Japanese GDP figures lifting JPY higher
  Published On Fri, May 16 2008, 07:40 GMT
• Lower than expected CPI leads stocks higher
  Published On Thu, May 15 2008, 06:49 GMT
• Watch out for CPI today
  Published On Wed, May 14 2008, 07:14 GMT
• Some Optimism Ahead of the Retail Sales
  Published On Tue, May 13 2008, 07:14 GMT
• Signs of Risk-Aversion Re-entering the Market
  Published On Fri, May 9 2008, 07:00 GMT

[ View All ]

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