Thursday May 8, 2008 - 11:25:40 GMT
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FX Blog- Market Snapshot Europe Mid-Session 8 May 2008
GVI Market Snapshot- Europe Mid-Session for May 8, 2008
- Market sentiment for the USD has continued to improve heading into the ECB decision and press conference today. Key also in recent sessions has been a couple of pieces of weak data out of Europe and Germany. The markets now appear to be taking a medium term view on prospective relative growth patterns in the U.S. and Europe. Dealers will be looking for any inklings of a softening of the anti-inflationary rhetoric by the ECB today. The unrestrained rise in oil prices continues to unsettle the markets although oil appears to have unlinked from the USD.
- Thursday sees the monthly ECB policy decision. No rate 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.
- U.S. weekly jobless claims are due. Markets are more sensitive to the absolute level of claims than to their weekly changes.
What the Market Prices are Indicating:
Forex and Commodities:
- The USD is trading higher vs. the EUR, but the GBP is firmer from late Wednesday. The EUR/GBP cross has eased.
- The carry trade funding currencies, JPY and CHF, are mixed vs. the USD. EUR/JPY is weaker. The EUR/CHF is weaker. The CHF is weaker vs. the JPY
- The carry-trade driven currencies (AUD, CAD and NZD) are mixed vs. the USD. Poor employment data have weighed on the kiwi. Aussie jobs growth was stronger than expected. Also Gold and oil are mixed. Crude oil remains at near record levels.
Equities and Bonds:
- The Shanghai Composite closed higher, but Hang Seng index fell. The Japanese Nikkei closed lower.
- Key European bourses are trading lower. Eurozone benchmark bonds are stromger.
- U.S. equities are currently seen opening higher later. U.S. bond prices are mixe.
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