Wednesday May 7, 2008 - 20:26:12 GMT
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FX Blog- Market Snapshot Far East Open for 7 May 2008
GVI Market Snapshot- Far East Open for May 8, 2008
- Market sentiment for the USD has continued to improve after a successful consolidation at the 1.5500 level in recent sessions. The USD was boosted by much weaker than expected Eurozone retail sales report. It might be the European economy (including Germany) is starting to experience a lagged impact 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 USD also saw support from better than expected 1Q08 U.S. productivity data.
- Thursday sees the monthly ECB policy decision. No rte change is expected, but the markets will be finely attuned to the tone of statements by ECB President Trichet. The BOE policy decision is awaited as well. No rate change is expected.
- Weekly U.S. jobless claims and March wholesale inventories are due on Thursday..
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 weaker. The EUR/CHF is weaker. The CHF is steady vs. the JPY
- The carry-trade driven currencies (AUD, CAD and NZD) are weaker vs. the USD. Also Gold and oil are easier. Crude oil remains at near record levels.
Equities and Bonds:
- The Shanghai Composite closed lower. The Hang Seng index eased as well. The Japanese Nikkei closed modestly higher.
- Key European bourses ended higher. Eurozone benchmark bonds are weaker.
- U.S. equities are closing sharply lower. U.S. bond prices are higher.
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