Monthly Archives: May 2011

CPI inflation increased to 4.5% y/y in April, significantly above expectations (consensus 4.1%, BarCap 4.2%, last 4.0%). Core inflation was 3.7%, above consensus expectations of an unchanged 3.2%. However, RPI inflation was in line with expectations, falling to 5.2% from 5.3% (BarCap 5.3%).

EUR USD (1.4170) Eurozone finance ministers approved a €78bn bailout package for Portugal last night, but left a conclusion on Greece for the meeting in June.

News BG: Mixed – C/A balance brings YtD surplus to 0.7% of GDP (p2) CZ: Mixed – April PPI accelerates to 6.4%YoY, C/A posts surplus (p2)

Today’s highlights: EUR/USD: Bearish “outside” Friday through critical 1.4156/48 price/retracement support to probe 1.4038/220 support.  Risk of surrender here to target 1.3655

G10 Currencies EUR: Yesterday the Eurogroup gathered in Brussels. The EMU finance ministers touched three broad areas: (1) Bailout package for Portugal. The statement brought not much of a surprise. The volume is EUR 78bn – as expected.

TOP EZ FinMins said for the first time that they would consider asking Greece’s private creditors to extend the maturities on their bonds to buy Athens more time to pay down its huge debt. At a meeting in Brussels the ministers also approved a bailout for Portugal and backed Italian Mario Draghi to become the […]

Overnight equity markets Nikkei          +0.16%          9’574.00 S&P500          -0.62%          1’329.47 Dow             -0.38%          12’548.37 Nasdaq          -1.63%          2’782.31

GBP/USD charted an inside day to leave our negative bias intact. We look for losses to the one year uptrend at 1.6067.

Far East mkt touting this around the last few hours… Spain May Have Billions Euros of ‘Hidden’ Public Debt, FT Says

Recent dollar gains seems to be in for a bit of congestion (before continuing stronger). So EURUSD risks a 1.4200/4350 bounce before lower.

Hints are augmenting that politicians are open to a re-profiling of Greek debt while still excluding a larger-scale restructuring. Together with yesterday’s Merkel guarantee last night’s Eurogroup meeting should add to modest spread tightening with Spain likely trailing behind in the run-up to this week’s auctions.