Tuesday June 10, 2008 - 20:15:38 GMT
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FX Blog- Market Snapshot Far East Opnr for 11 June 2008
GVI Market Snapshot- Far East Open for June 11, 2008
Profile of Key Markets:
- The USD has advanced strongly vs. the EUR from late Monday levels. More indirect intervention threats by Secretary Paulson gave it a lift. They built on hawkish comments by Fed Chairman Bernanke late Monday, which came after ECB President Trichet pointed out that he never had said that there was a group of ECB members in favor of a series of rate hikes by the central bank.
- The EUR/USD seems to have given in to the pull of the 1.5500 magnet level. The GBP is lower vs. the USD, and EUR/GBP is about steady. This suggests a broader USD advance.
- The USD/JPY advanced again. The pair has been sending a signal this week that the USD was not in for a sustained bout of weakness. The EUR is still vs. the JPY. The CHF/JPY is weaker, and The CHF is now softer against the EUR. SNB authorities signaled that an early rate hike is possible.
- Oil has fallen and gold is sharply weaker. The commodity currencies are mostly weaker. The USD/CAD eased after the Bank of Canada surprised the markets by holding rates steady instead of cutting -25bps. The Bank also signaled no future policy changes.
- Asian equities closed sharply lower after the Bernanke comments. European bourses closed weaker. U.S. equities are closing mixed. lower.
- JGB prices fell today, while the prices on E-Z bonds (especially 2s)are sharply lower. The E-Z 2s vs 10s spread flattened. U.S. bond prices are lower. The E-Z minus U.S. 2-yr note spread was last -184bps, -1.
- See the GVI Calendar for the full schedule of key data. No major U.S. or Canadian trade data are due, although weekly energy inventories will be a focus. U.K. May employment data are awaited.
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