Forex Analysis

Tapering – NZ Style

• Growth indicators moderating • But still robust • Profits and employment looking good

RBA Credit – April 2013

• Private sector credit rose by 0.3% in April to be 3.1% higher over the year. • Housing credit increased by 0.4% in April following an increase of 0.4% over March. It is up 4.5% over the year.

USD trading all over the shop on USDJPY flows.

There was a flurry of “developments” out of Japan today that saw a dramatic pivot in JPY crosses after USDJPY looked like it wanted to have a look at the 100 level.

Major overnight headlines: • Nikkei slumps more than 5.0% as JPY strengthens, 10-year JGB yield lower on the day though • BoJ says long-term JGB purchases in June to total around 7.0 trillion, but amount can be adjusted, Thomson Reuters

Mid-Day FX Market Analysis

USD: The Dollar followed through on yesterday’s severe turnaround with a downside breakout during overnight trading,

Abenomics to make or break Japan

Japan continues to be a major financial market story. Here is Nordea’s take on Abenomics, the new Japanese economic programme to end deflation and revitalise the economy.

Central European Daily

Polish zloty hit 10-month low on revised GDP growth EC recommends abrogation of EDP for Hungary Revised Polish GDP data, showing growth at only 0.5 % y/y, dragged down the zloty as well as the Hungarian forint.

FX Morning Rundown

Following the soft close for the US (S&P ?0.7%), Asian equities are trading lower across the board, with the Nikkei leading the moves (-5.15%).

Morning FX Market Commentary

Currencies: Dollar fails to hold post consumer confidence gains The dollar lost ground across the board. The US currency was sold as LT US bond yields declined more than in other core countries.

Eurozone economic sentiment readings and US QI GDP the main interest today

German CPI inflation rebounded a little more strongly than expected in May rising to 1.7% YoY from 1.1% YoY.

USD/JPY Analysis

The pair closed in NY Wednesday at Y101.20 after seeing Nikkei inspired lows of Y100.71. Early sales of Nikkei futures pre Tokyo saw dollar-yen pressed to extended lows of Y100.59.

FX Daily

Market movers today • In the euro area, the EU Commission is due to release its confidence indicators, which we expect to show some improvement in May from low levels.