Tuesday June 28, 2005 - 03:31:42 GMT
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Tricom Futures and Foreign Exchange -
Forex: Beware, this EUR recovery could be a "Dead Cat" bounce.
The USD and yen retreated against the euro on Monday on concerns that record high oil prices could threaten global growth, with the euro zone currency also garnering support from improving German business confidence. German business confidence rose in June, as expected, for the first month in five as companies grew more optimistic about both current activity and the future.
U.S. Treasury debt prices were mostly higher on Monday, with flattening in the yield curve accounting for much of the price movement on a mostly quiet day.
Expectations for the Federal Reserve to press on with its series of rate increases meshed with worries about slowing economic growth to bid up longer maturities while holding two-year Treasury note prices steady.
The Federal Open Market Committee holds a two-day meeting Wednesday and Thursday and is widely expected to raise short-term rates by 25 basis points, putting the federal funds rate at 3.25 percent. It would be the Fed's ninth increase in its current tightening cycle.
Many analysts expect few changes to the Fed's post-meeting statement, with the assessment that policy remains accommodative likely to be maintained, suggesting more rate hikes at subsequent meetings.
U.S. stocks slipped on Monday, hurt by oil's move above $60 a barrel to another all-time high and by companies' weak profit outlooks, while Apple Computer Inc. led the decline on Nasdaq.
Oil prices rose more than a dollar to a new record near $61 on Monday, driven by the resilience of world energy demand in the face of high fuel costs and worries about oil policy under Iran's new hard-line president.
Today’s Economic Releases:
US: Consumer Confidence
Today’s Top Trades
· Sell EUR/USD strength towards 1.2210-20
. Buy USD/CHF around 1.2620-30
. Buy USD/JPY around 109.20-30
. Buy AUD/NZD around 1.0845-55
For more ideas send me an email, [email protected]
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