Monthly Archives: May 2011

The “re”-words. Restructuring, reshaping, re-profiling – the dictionary of terms for measures to tackle the Greek debt problem is growing inflationary.

This week’s initial jobless claims reading fell to 409,000 (consensus 420,000), providing relief after three straight elevated readings in which claims averaged 449,000 per week.

Developed macro 1.       In a day almost devoid of European data, the focus will be on EU/ECB speakers once again, as dissensions persist over a possible Greek debt “re-profiling”. 2.       The BOJ is expected to stay on hold.

The S&P 500 may have some more gains left. If it crosses above 1,351, new highs above 1,370 are probable.

Over the last 48 hours the outlook for risk has improved somewhat as the US equity market rebounded off its recent low.

Commodity rally lifts FX markets US sovereign CDS worth watching as it may indicate further USD weakness

EUR/GBP EUR/GBP has confirmed the ST double bottom drawn at 0.8675/80. 0.8900/05 and 0.8925/30 should be the next major steps on the way back to the 0.9045/50 resistance area and the 0.9140/50 region.

EUR USD (1.4290) The Fed publicised the minutes from the April 26- 27 FOMC meeting yesterday. The Committee discussed tightening policy by first halting the reinvestment of principal on maturing paper.

Today’s highlights: EUR/USD: Solid rebound from 1.4195 (now also key basing line) to new recovery peak.  Also above the 55-DMA, through the Friday peak, 1.4341, is needed to confirm a base

– G10 and Asian FX slightly stronger vs USD, Asian equities mixed – UK retail sales are likely to only provide limited GBP support – We have revised our USD “Fair Value” estimates stronger vs G10 – Australia and Sweden lead cross border M&A flows

News BG: Mixed – Cabinet reshuffle of some top positions (p2) HR: Positive – Croatia meets the justice and fundamental rights conditions for EU accession (p2)