Despite the ECB using the so-called nuclear option yesterday in unveiling it's almost $1 trillion dollar rescue package, the Euro has erased most of the gains of the past 24 hours heading into the London session. Uncertainty still reigns as the proposed plan will entail firing up the printing presses in order to print Euros to purchase government debt, thus prompting fears of a further devaluing of the European currency. Adding to the concerns is the skepticism that Greece will have trouble adhering to the rigorous austerity measures, as well as the fact that the EU's GDP will suffer and interest rates will remain anchored at low rates long after the US begins its hiking cycle. The current reality is that the rescue package has helped everyone but the EU.

The 1.3093 highs in the EUR/USD we saw almost a day ago are long gone, and replaced with a Asian session drop of about 80 pips to a low of 1.2705. EUR/JPY slid from 119.40 to 117.75 lows on the day as well. The GBP/USD registered a 1.4775 low on its continued fall due to the continued political clouds that are obscuring the future of the government amidst the resignation of Prime Minister Gordon Brown. GBP/JPY dropped from 138.75 to just under 137.00 over the course of the day. Overall, risk appetite melted after enjoying huge gains to start the week. USD/JPY traded between 93.35 and 92.60 as the yen firmed as the day wore on.

A slew of Chinese data, highlighted by CPI, PPI and Retail Sales helped to point to the continuing prospect of an overheating economy that must be reined in by quantitative tightening. The FX markets paid no heed to the Chinese data which is usually considered a risk event.

Data Releases (London Session) prior expected

5/11/2010

5:45

SZ

SECO Consumer Confidence

APR

-7

-1

5/11/2010

6:00

GE

Consumer Price Index (MoM)

APR F

-0.10%

-0.10%

5/11/2010

6:00

GE

CPI - EU Harmonised (MoM)

APR F

-0.10%

-0.10%

5/11/2010

6:00

GE

CPI - EU Harmonised (YoY)

APR F

1.00%

1.00%

5/11/2010

6:00

GE

Consumer Price Index (YoY)

APR F

1.00%

1.00%

5/11/2010

6:00

GE

Wholesale Price Index (MoM)

APR

1.30%

0.90%

5/11/2010

6:00

GE

Wholesale price Index (YoY)

APR

4.30%

5.20%

5/11/2010

8:30

UK

Industrial Production (MoM)

MAR

1.00%

0.30%

5/11/2010

8:30

UK

Industrial Production (YoY)

MAR

-0.10%

0.60%

5/11/2010

8:30

UK

Manufacturing Production (MoM)

MAR

1.30%

0.40%

5/11/2010

8:30

UK

Manufacturing Production (YoY)

MAR

1.40%

1.60%