Wednesday May 14, 2008 - 09:42:47 GMT
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FX Blog- Market Snapshot Europe Mid-Session 14 May 2008
GVI Market Snapshot- Europe Mid-Session for May 14, 2008
- Market sentiment for the USD continues to improve. Comments by French Finance Minister Lagarde that at 1.5500 the EUR/USD was overvalued by 20% was an impetus for its latest advance, although her perspective is not necessarily that of the ECB. High U.K. average earnings data today was another nail in the coffin for a June rate cut by the Bank of England.
- The EUR/USD continues to pivot the EUR/USD 1.55 line. Decisively below 1.55 suggests a 1.50-1.55 broad trading range..
- Key U.S. data today will be the release of the April CPI report.
What the Market Prices are Indicating:
Forex and Commodities:
- The USD is higher vs. the EUR. The GBP is lower from late Tuesday. The EUR/GBP cross is about steady.
- The carry-trade driven currencies (AUD, CAD and NZD) are trading mostly weaker vs. the USD. Gold and oil are mixed.
- The carry trade financing currencies, JPY and CHF, are weaker vs. the USD. EUR/JPY is up modestly. The EUR/CHF is firmer. The CHF is steady vs. the JPY
Equities and Bonds:
- The Shanghai Composite closed higher, while the Hang Seng fell. The Japanese Nikkei closed better. !0-yr JGBs closed at 1.71%, +13bps.
- Key European bourses are mixed. Eurozone benchmark bonds are weaker.
- U.S. equities are currently seen opening mixed to higher later. U.S. bond prices are lower.
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