Monthly Archives: May 2011

– NZD leads modest bounce vs USD, Asian equities mixed – German Ifo likely to add pressure on the euro – Our short term model estimates EURUSD at about 1.41

GBP/USD has started to erode its one year uptrend at 1.6096/78. It has held its initial test f its 50% retracement of the move higher seen this year.

Contagion in euro zone spreads highlighted in this report yesterday and in the Global Technical Trends, Euro area tilting at windmills, 23 May 2011, has triggered broader risk reduction and a persistent USD bid.

Stutchbury: http://www.theaustralian.com.au/national-affairs/commentary/fix-this-broken-global-system/story-e6frgd0x-1226061411823 This and the renewed euro-zone financial instability means the RBA almost certainly will sit pat at its June 7 board meeting.

Developed macro 1.       Risk aversion remains elevated as equity markets slide in US and Europe 2.       US: New home sales to edge up 3.       The German IFO is expected to decline in May but current economic conditions should remain positively oriented

Barrage of Eurozone news leaves EUR under pressure CHF strength likely to be limited from here as SNB continues to express concern over FX strength Higher than expected Norwegian GDP to keep NOK well bid

The current USD rally is happening at a time when the US economy is weakening. Historically a weak US economy would have been seen as negative for the USD.

The Turkish lira is under selling pressures as the global market sentiment soured. USD-TRY finally has crossed the 1.60 barrier and vs. the basket the TRY weakened beyond 1.92.

EUR/PLN: Has found interim support at 3.8972/3.8766 but remains sidelined for now. EUR/HUF: Bounces off the 263.06/259.79 support area but should be capped around the 270/272 area.

The Eurozone PMIs showed clear signs of slowdown in May with the composite survey falling to a seven-month low of 55.4 from 57.8. The fall was broadly-based, but led by manufacturing, and the slowdown more marked outside France and Germany. The PMI surveys are still consistent with above-trend growth in Q2 and do not alter […]

EUR pressured by ratings agencies, Spanish elections USDJPY to head towards 80.00 We favour selling GBPNOK on the back of hawkish Norges Bank and expected strong GDP this week