Forex News

Developed macro 1.       Spanish local elections reveal worst defeat for ruling Socialist Party in 30-years. 2.       Risk off tone permeating through markets as eurozone periphery concerns rise. 3.       Greece still a focus as the ‘Troika’ ends its assessment of the economic situation.

Two striking changes on the charts have occurred over the past few weeks. Firstly, inflationary expectations have been pared back as reflected by the breakeven rates.

The collapse in Silver has come at a very significant mathematical level. It is now probable that the Silver / Gold ratio is in a new bear market and this should mean pressure on “risk”.

Today’s highlights: EUR/USD: Solid defence of chart (1.4195) and key basing line to another new recovery peak.  Focus on 1.4341; through here confirms a base to target 1.4424/43 next

EUR USD (1.4305) The ECB strictly opposes any notion of peripheral debt restructuring, be it soft or otherwise, as emissaries Bini Smaghi and Stark adamantly made clear.

We revise lower our rate forecast for the Czech Republic to one 25bps increase by end-2011 (from two such increases).

The ‘international’ view of reforms in Greece, the threat of illiquidity and the country’s return to the capital market, scheduled for 2012 – Christoph Weil and me analyse the hurdles Greece has to clear.

From the subdued price action this week it would appear that the initial wave of risk reduction, which began at the start of the month is over. Cloud support is holding (GBP/USD closed above its daily cloud yesterday despite opening below)

BOJ: The Bank of Japan voted unanimously to leave the policy rate at zero to 0.1% following a two-day policy board meeting (2): — BOJ: Japan Economy Under Strong Downward Pressure — BOJ: But Econ Expected to Return to Moderate Recovery Path — BOJ: Uncertainty About Effects of Quake High — BOJ Repeats: Must Watch […]

Overnight equity markets Nikkei          -0.01%          9’619.82 S&P500          +0.22%          1’343.60 Dow             +0.36%          12’605.32 Nasdaq          +0.30%          2’823.31

News BY: Positive – Russia agrees to lend Belarus USD 3-3.5bn (p2) KZ: Mixed – Central Bank Governor Grigory Marchenko says he opposes “short-term speculative bets” on KZT (p2) LN: Positive – IMF revises GDP growth to 6% and 4.75%, budget deficit to 5.3% and to 2.8% of GDP for 2011 and 2012 respectively (p2)