Thursday June 5, 2008 - 09:53:34 GMT
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FX Blog- Market Snapshot Europe Mid-Session 5 Junel 2008
GVI Market Snapshot- Europe Mid-Session for June 5, 2008
Profile of Key Markets:
- The USD is trading roughly steady vs. the EUR from late Wednesday levels. The pair continues to consolidate its losses from Tuesday. The EUR/USD is still pivoting the neutral 1.5500 line. The ECB policy decision (no change expected)and press conference will be closely watched today. There is talk that Trichet could undermine the EUR if he comes across as too hawkish.
- The GBP has eased vs. the EUR and USD. The key focus now is BOE monetary policy with the central bank confronting high inflation and a weakening economy. The BOE is generally expected to hold policy steady shortly, but most expect several rate cuts by yearend.
- As for the USD, the markets continue to respond to the verbal intervention in the U.S. currency by Fed Chairman Bernanke on Tuesday and Wednesday. The new USD policy could face a test on Friday following the May employment data.
- The USD/JPY is higher along with USD/CHF. The EUR is up strongly vs. the JPY. The CHF/JPY has gained vs. the psychological 100 line. The CHF is lower against the EUR.
- Oil remains vulnerable but has gained following reports of a refinery explosion in Kuwait. Oil has shown little ability to rally on constructive news. It still is a key influence on the EUR/USD. Gold is down as well. The AUD is lower despite stronger than expected trade data. The RBNZ kept its OCR target steady at 8.25%b but hinted at future rate cuts. The kiwi is sharply weaker.
- Asian equities ended mixed. European bourses are better. The early call for U.S. equities is for a higher open.
- JGB prices improved, while the prices on E-Z bonds has eased. U.S. bond prices are now lower. The spread on EZ minus U.S. 2s was last -188bps, 0.
- The highlights today are the BOE and ECB policy decisions. U.S. weekly jobless figures are due along with the Canadian Ivey PMI data. See the GVI Calendar for the full schedule of key data.
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