Tuesday May 6, 2008 - 09:42:03 GMT
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FX Blog- Market Snapshot Europe Mid-Session 6 May 2008
GVI Market Snapshot- Europe Mid-Session for May 6, 2008
- The USD is holding steady following a volatile session on Monday. A key driver of trade was a spike in oil prices to new highs. Dealers were feeling that the EUR/USD should trade in tandem with the oil price, but it is possible that the USD influences the price of oil more than the opposite. Time will tell, but it is significant that EUR/USD is still pivoting the 1.5500 line. There are also rumors of a possible Russian rouble revaluation.
- No rate change by the RBA was as expected.
- From Europe, Swiss CPI data remained elevated +2.3% yr/yr. The E-Z final April Services PMI was in line with the flash estimate. The U.K. April Services PMI was weaker than seen.
- No major data are scheduled for release from the U.S. on Tuesday. The Canadian Ivey PMI is due.
What the Markets are Saying:
Forex and Commodities:
- The USD is trading steady vs. the EUR and is higher vs. the GBP after the weak PMI data. The EUR/GBP cross has gained.
- The carry trade funding currencies, JPY and CHF, are stronger vs. the USD. EUR/JPY is now about steady. EUR/CHF is weaker. The CHF is higher vs. the JPY
- The carry-trade driven currencies (AUD, CAD and NZD) are mixed vs. the USD. No impact from the unchanged RBA decision is evident. Also Gold and oil are higher. Crude oil is above the psychological $120.00 line.
Equities and Bonds:
- The Shanghai Composite closed lower. The Hang Seng index has gained. The Japanese Nikkei was closed due to the Golden Week holidays.
- Key European bourses are trading lower. Eurozone benchmark bonds are steady.
- U.S. equities are seen opening about steady. U.S. bond prices are weaker.
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