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Forex Blog - European Market Update: Markets in a Lull Ahead of this Week's European Rate Decisions and US Payrolls Data
¬∑*** ECONOMIC DATA ***
¬∑UK May Nationwide Consumer
Confidence: 69 v 67e
¬∑UK May NTC/REC Permanent Placements Index: 48.
6 v 48.9e
¬∑SP May Services PMI: 43.3 v 42.5 prior
Services PMI: 48.1 v 49.5e
¬∑FR May Services PMI: 50.5 v 50.
¬∑GE May Services PMI: 53.8 v 53.7e
¬∑EU May Services PMI:
50.6 v 50.6e
¬∑EU May Composite PMI: 51.1 v 51.1e
Services PMI: 49.8 v 50.5e
¬∑EU Apr Retail Sales: M/M -0.6% v 0.2%e
|| Prior revised from -0.4% to -0.9% |||| Y/Y -2.9% v -0.8%e || Prior
revised from -1.6% to -2.3%
¬∑In the newspapers overnight the
Financial Times noted in an article overnight that new US accounting rules
could lead to more losses at banks. Increased regulations for off-balance
sheet entities could result in up to $5T of assets having to be returned to
the books of banks. According to the Chicago Tribune UAL Corp. (UAUA) is
expected to ground dozens of aircraft. The company is expected to ground
its planes which are the least fuel efficient. In total, the company is
expected to cut its 460-aircraft mainline fleet by 70 jetliners by the end
¬∑In energy news overnight US Senator Cantwell (Democrat) is
looking to have regulators issue an emergency rule that will give the FTC
powers to probe possible oil market manipulation.
¬∑In central bank
speak overnight the ECB's Noyer said that Euro-zone inflation will peak and
then decline rapidly if wages are contained, adding that it is clear that
inflation remains a risk and the ECB must be prepared to adjust its
monetary policy accordingly.
¬∑In central bank speak overnight the
ECB's Noyer said that Euro-zone inflation will peak and then decline
rapidly if wages are contained, adding that it is clear that inflation
remains a risk and the ECB must be prepared to adjust its monetary policy
¬∑In currencies dealers continued to take note of a
potential change in USD sentiment following Bernanke's comments on Tuesday.
It was the first phase of verbal intervention by Bernanke since the change
in the FX language at the April G7 meeting. The USD also benefiting from
continued concerns over the European banking sector as various rating
agencies and financial sector analysts revised their views and estimates.
Thus risk aversion theme is impacting the global capital markets as
equities are lower, bond future prices firmer and carry-related pairs are
¬∑Looking ahead, focus today will fall upon the ADP
employment report due out at 8:15 ET, as well as the Q1 Final nonfarm
productivity and unit labor cost due at 8:30 ET, and the May ISM non-
manufacturing composite due at 10:00 ET. In Fed speak the Fed's Bernanke is
scheduled to speak on the economy at Harvard at 14:45 ET. On the earnings
front Williams Sonoma is due to report earnings in the premarket.
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