Wednesday May 21, 2008 - 09:49:23 GMT
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FX Blog- Market Snapshot Europe Mid-Session 21 May 2008
GVI Market Snapshot- Europe Mid-Session for May 21, 2008
How Key Market Prices are Performing:
Forex and Commodities:
- The USD is sharply lower again vs. the EUR. The GBP is lower from late Tuesday. The EUR/GBP cross is higher.
- The carry trade financing currencies, JPY and CHF, are stronger vs. the USD. The CHF is higher vs. the JPY. As for te EUR crosses, EUR/JPY has gained. The EUR/CHF is better as well.
- The carry-trade driven currencies (AUD, CAD and NZD) are broadly higher vs. the USD. Gold and oil are higher.
Equities and Bonds:
- The Shanghai Composite rebounded on Wednesday, while the Hang Seng gained. In Japan, the Japanese Nikkei closed lower. 10-yr JGBs ended at 1.620%, +0.5bps.
- Key European bourses are trading higher. Eurozone benchmark bond prices are about steady.
- U.S. equities are seen opening higher later. U.S. bond prices are weaker.
- An unexpected gain in the headline German IFO survey has given the EUR a lift today. The market response proves once again that Germany=Euroland in the minds of the forex markets. There have been complaints that the ECB operates this way also.
- There was market analysis yesterday that indicated that Asian central banks this week had been diversifying USD reserves into EUR. If true, this could be the logical explanation for what appears to have been illogical market behavior. Presumably, with the USD now lower, interest to unload USD will start to abate. The tone of the USD has turned negative from neutral.
- Weekly U.S. energy inventory data and the latest Fed Minutes are due today. Looking ahead, next Monday will be major holidays in the U.S. and London.
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