Wednesday May 7, 2008 - 09:48:22 GMT
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FX Blog- Market Snapshot Europe Mid-Session 7 May 2008
GVI Market Snapshot- Europe Mid-Session for May 7, 2008
- The USD is trading higher on the back of a much weaker than expected Eurozone retail sales report. Some are wondering if the European economy is going to start weakening more now as a lagged effect from the high EUR, strong oil prices and the slowdown elsewhere in the global economy. The unrestrained rise in oil prices is another influence for the markets to digest. The EUR/USD 1.5500 line remains pivotal to the tone of the markets.
- March U.S. pending home sales data are due 14:00 GMT. This figure is a good predictor of the critical existing homes sales data with a one-month lag. At 12:30 GMT, U.S. productivity data are awaited.
What the Market Prices are Indicating:
Forex and Commodities:
- The USD is trading higher vs. the EUR and vs. the GBP from late Tuesday on data The EUR/GBP cross has gained.
- The carry trade funding currencies, JPY and CHF, are weaker 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 weaker vs. the USD. Also Gold and oil are a touch easier, however, crude oil is at near record levels ahead of the weekly inventory data.
Equities and Bonds:
- The Shanghai Composite closed lower. The Hang Seng index eased as well. The Japanese Nikkei closed modestly higher.
- Key European bourses are trading higher. Eurozone benchmark bonds are weaker.
- U.S. equities are seen opening lower. U.S. bond prices are mixed.
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