Thursday June 12, 2008 - 09:54:06 GMT
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FX Blog- Market Snapshot Europe Mid-Session 12 June 2008
GVI Market Snapshot- Europe Mid-Session for June 12, 2008
Profile of Key Markets:
- The USD is sharply higher vs. the EUR from late Wednesday levels. The day to day swings suggest his is a market with no convictions. On balance, dealers have become comfortable with the notion of a 1.54-1.58 trading range for the pair. The view now is that monetary officials are not unhappy with stabilizing the USD around the 1.5500 line.
- Dealers are defensively positioning long the USD ahead of the Friday and Saturday G8 FinMin (not central bankers) meeting in Japan. More USD verbal intervention should be expected. We donâ€™t feel that open market intervention is on the cards at the present time.
- Dealers are also awaiting the outcome of the Irish vote on the EU Lisbon Treaty today. Results are expected on Friday and the vote is thought to be a close one.
- USD demand could also be coming from the proposed $46bln cash bid by Inbev for Budweiser announced today. Talk is that the price will probably go higher.
- The GBP is lower vs. the USD, and EUR/GBP is steady.
- The USD/JPY is higher in line with the better USD tone. The EUR is weaker vs. the JPY. The CHF/JPY is lower as well. The CHF is weaker against the EUR.
- Oil is about steady after spiking higher yesterday on another sharp drawdown of weekly crude inventories. On a day over day basis the EUR/USD to oil link has not worked, but on an intraday basis it is working again. Gold is lower. The commodity currencies are weaker. Much softer than expected Australian employment data suggested that the economy might finally be slowing.
- Asian equities closed broadly lower. European bourses are higher. U.S. equities are seen opening higher later.
- JGB prices closed about steady, while the prices on E-Z bonds are weaker. The E-Z 2s vs 10s spread has flattened. U.S. bond prices are lower. The E-Z minus U.S. 2-yr note spread was last -170bps, +3.
- See the GVI Calendar for the full schedule of key data. U.S. retail sales and weekly jobs data are the highlights.
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