Tuesday May 20, 2008 - 20:23:53 GMT
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FX Blog- Market Snapshot Far East Open for 20 May 2008Global-View.com Market Sentiment reports are prepared periodically during trading sessions by the trading professionals at GVI Gold. For more information on the GVI Gold Service Click Here.
GVI Market Snapshot- Far East Open for May 21, 2008
What the Market Prices are Indicating:
Forex and Commodities:
- The USD is sharply lower vs. the EUR. The GBP is higher from late Monday. The EUR/GBP cross is steady.
- The carry-trade driven currencies (AUD, CAD and NZD) are mostly higher vs. the USD. Today the CAD is about steady. Gold and oil are higher.
- The carry trade financing currencies, JPY and CHF, are stronger vs. the USD. EUR/JPY has gained. The EUR/CHF is sharply weaker. The CHF is higher vs. the JPY
Equities and Bonds:
- The Shanghai Composite closed sharply lower, while the Hang Seng was weaker as analysts said that the negative impact of the Chinese earthquake may now be worse that initially thought. The Japanese Nikkei closed lower. 10-yr JGBs closed at 1.62%, -5bps.
- Key European bourses closed sharply lower. Eurozone benchmark bond prices ended higher.
- U.S. equities closed sharply lower. U.S. bond prices are ending higher.
- A renewed focus on the price of oil fueled a negative shift in sentiment for the USD. The outlook initially turned sour following a strong German PPI report. Later, the markets sold the EUR/USD on a weaker than expected economic sentiment reading in the volatile German ZEW index. Then hawkish monetary policy comments by the head of the ZEW economic think tank sent the USD tumbling. Dealers will be looking ahead to the release of the more credible German IFO survey on Wednesday. Swissy gained across the board today.
- The lead EUR/USD has been trading a rough 1.54-1.56 range recently (1.53-1.57 on the outside). 1.55 repeatedly has been exerting a strong gravitational pull on this currency pair. As the EUR/USD to pivots 1.55 line. Its position relative to that level has been setting the tone of the market. The tone of the markets is now negative.
- Wednesday will see the latest BOE meeting minutes, the key German IFO data and weekly U.S. energy inventory data. U.S.
- Otherwise, this remains a relatively slow week with little major data due from the U.S. Furthermore, next Monday will be major holidays in the U.S. and London.
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