US confidence recovering slowly
It was a quiet session overnight with both US and UK markets on holiday. The data calendar picks up again in the US today after the three day weekend with the release of Conference Board Consumer Confidence for May. The preliminary May reading of University of Michigan confidence rose to new post-crisis highs but we expect a more muted increase in the Conference Board measure. Our 72.0 forecast is an improvement on April’s 68.1 reading and better than the 71.0 consensus but would still leave the measure below the post-crisis highs of 73.1 reported in October of last year. Our expectation is that next week’s more critical releases will come in on the weak side and that stretched USD long positions could be somewhat vulnerable at that point. We like buying the USD on pullbacks vs. the JPY, CHF and GBP.
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BNP Paribas