Monthly Archives: May 2011

Overnight equity markets Nikkei          -0.43%          9’620.82 S&P500          +0.88%          1’340.68 Dow             +0.65%          12’560.18 Nasdaq          +1.14%          2’815.00

GBP/USD has sold off towards its one year uptrend at 1.6082. While we would allow for this to hold the initial test, we have some doubts that it will remain capable of reasserting the long term bull trend.

Without any noteworthy data releases scheduled in the Eurozone, impetus for the Bund future this morning could come from UK retail sales and, probably more importantly, from eurogovy supply activities.

TOP *JAPAN 1Q GDP SHRINKS ANNUAL 3.7% vs -1.9% expec S&P SAYS SEES POSSIBILITY OF DOWNGRADE IF NZ’S EXTERNAL POSITION DOES NOT IMPROVE

Start with the conclusion… Bottom line: Japan is flying low. And it’s not just the earthquake. All the more, therefore, the Bank of Japan will eventually have to expand its asset purchase program further.

EUR/USD correction continues and 1.4350/4440 still seen as the primary target, GBP continues to weaken and the bounce in EURGBP, up from its earlier broken trend line looks promising,

FTD cited unnamed euro-area officials saying that ECB president Trichet warned euro-are finance ministers on Monday that the ECB would no longer accept Greek government debt as collateral should there be a decision to lengthening Greece’s debt maturities.

Credit Suisse’s fair value (CSFV) model produces FX valuations driven by macro-economic variables.  The key conclusions of our 2011 update are: US dollar fair value estimates have been broadly revised stronger versus all G10 currencies compared to the 2010 estimates.

April IP growth was reported at 4.5%, further extending the deceleration of the recent months (from 5.3% in March and 5.8% in April).

Overnight equity markets Nikkei          +0.99%          9’662.08 S&P500          -0.04%          1’328.98 Dow             -0.55%          12’479.58 Nasdaq          +0.03%          2’783.21

Central banks in the region are still fighting the inflation battle and will likely progress with a combination of interest rate hikes and currency strength.