• Peter Rosentreich, chief market analyst at ACM

    ACM - In our view Japan's economic data was decidedly negative. Retail sales exceeded market expectations reaching 0.2% but has slowed since February's peak and when you carve out fuel consumption was -0.1% yoy. Household survey's showed real spending was down -3.2% vs. -2.1% exp and Auto sales slowed to 0.2%. In our mind just more evidence that Japan is facing significant headwind on both the domestic & international front and we expect Jpy to suffer.
  • Peter Rosentreich, chief market analyst at ACM

    ACM - Yesterday, the SNB held rates, with the 3m-Libor mid point 2.75%. Markets were on the fence to whether the Central Bank would opt to challenge building inflationary pressures or would a slowing q1 0.3% GDP q/q keep the bank on hold. While the market got their answer on rates, the accompanying statement had a neutral tone which weighed heavily on the Chf.
  • Peter Rosentreich, chief market analyst at ACM

    ACM - In Japan the BoJ held rates at 0.50% as was universally expected. Inflation fears have increased in Japan so it will be interesting to hear if Shirakawa will shift its focus from sagging economic outlook to inflation (however CPI slowed to 0.9% but is expect to accelerate to 1.4% in May). Industrial production for April y/y tick up softly to 1.9% vs. 1.8% exp (but still a sign of a weak economy), while consumer confidence fell to 34.1 vs. 35.0 exp. - Lowest level since December 2001.
  • Peter Rosentreich, chief market analyst at ACM

    ACM - The BoE MPC held rates at 5.0% as the market anticipated and released no statement accompanying statement. This decision was consistent with the previous inflation report which warned of increasing price pressure and headline CPI which hit 3.0% last month. While we don't see rates heading lower in the near term the BoE will need to keep an eye on crashing economic data especially in the housing market.
  • Peter Rosentreich, chief market analyst at ACM

    ACM - The real activity will start in the US with S&P/Case-Shiller home price index, Conference Board confidence index and finally Richmond Fed manufacturing index which is expected to stay at dejected levels around 0.
  • Peter Rosentreich, chief market analyst at ACM

    ACM - The Dollar rebounded from a 2-1/2 week low versus the Euro on Monday after a key forecasting gauge unexpectedly rose in April, suggesting that a sharp economic downturn in the US might be nearing a bottom. That eased fears about consumer confidence and reassured investors that the Federal Reserve would have room to hike interest rates later this year. The Fed's aggressive interest rates cuts to ward off a recession have undermined the Dollar's appeal to foreign investors seeking higher returns in favor of the euro and other high-yielding currencies.
  • Peter Rosentreich, chief market analyst at ACM

    ACM - The RBA held rates at 7.25%. This was widely expected but the markets were nevertheless surprised by the neutral stance the Bank seems to have taken. Markets have been pricing in another rate hike near term but the probability shifted slightly after yesterd'ay's statement. The RBA noted increasing price pressures but pointed to slowing domestic demand as a constraint of inflation.
  • Peter Rosentreich, chief market analyst at ACM

    ACM - Analysts said the Dollar would likely stay confined to current trading ranges, awaiting a push from either the Federal Open Market Committee (FOMC) statement accompanying its interest rate verdict or first-quarter growth numbers, both due on Wednesday. The policy-setting FOMC is widely expected to cut the benchmark overnight lending rate by only 25bp to 2% at the end of a two-day meeting, and signal that its interest rate-cutting campaign is over for now. Growing speculation that the Fed might stop cutting interest rates and a rise in U.S. stocks on takeover deals earlier lifted the Dollar and global sentiment improved last week amid stronger-than-expected US corporate earnings and a growing view that the worst of the credit crisis has passed.
  • Peter Rosentreich, chief market analyst at ACM

    ACM - We are expecting the BoC to cut rates by 50bp to 3.00% exp in line with market expectations. Currently the market is pricing in 48bp of easing and comments from central banks have led us to believe that the are looking to follow the Fed's aggressive easing cycle downwards. Cad is beginning to be pulled by two forces: the higher commodity prices and exposure to the US and slowdown in domestic growth. Both these forces should keep UsdCad in a 1.000 - 1.0330 range near term.
  • Peter Rosentreich, chief market analyst at ACM

    ACM - In Australia, the RBA left it benchmark rate at 7.25% as widely expected. But it was the accompanying statement which moved the Aud to lower levels : [the] tightening in financial conditions has been substantial [and] inflation will remain high in short term, but decline over time. had clear overtones of prudence albeit less hawkish then the past two statements. Consequently traders sold the Aud as the probability of another hike decreased.
  • Peter Rosentreich, chief market analyst at ACM

    ACM - Usd was weaker in Asian sessions as traders returned from Easter to question the greenback's euphoria of last week. Eurusd rose to 1.5573 and UsdJpy fell to 100.08. The Usd inability to rally, especially given the positive existing home sales which rebounded yesterday by 2.9% to 5,030,000 in Feb, is a harbinger of near term Usd weakness. Signs of global slowdown should offer some support to the USD, particularly as market have priced in a probability that other central banks might ease their rates in teh short term.
  • Peter Rosentreich, chief market analyst at ACM

    ACM - It remains to be seen whether the Federal Reserve's attempt to increase liquidity in the market will have any effect on investor sentiment. The market awaits the FOMC rate decision which is now broadly expected to be a 100bp cut, revised from 75bp. The dollar has been relatively stable within the past 24 hours. EURUSD trades now at 1.5790, down from its 1.5904 high early Monday morning.
  • Peter Rosentreich, chief market analyst at ACM

    ACM - The US Dollar tumbled to record lows against the Euro and the Swiss franc on Thursday after the European Central Bank downplayed prospects of an interest rate cut and did not voice concerns about the rally in the Euro. Analysts said there had been some anticipation that ECB President Jean-Claude Trichet would comment on the Euro after remarks this week by euro zone finance ministers group chairman Jean-Claude Juncker that the common currency was overvalued.
  • Peter Rosentreich, chief market analyst at ACM

    ACM - Bernanke's comments spooked markets yesterday when he emitted fresh warnings over the lackluster performance of the US economy and dour predictions as the repercussions of the US bank failures. His remarks to the Senate Banking Committee triggered a widespread reaction against the dollar. The reeling of the dollar accelerated with the latest bout of grim figures that confirm that the US economy is moving closer to the brink of stagflation.
  • Peter Rosentreich, chief market analyst at ACM

    ACM - The Dollar fell on Thursday, touching a two-week low versus the Euro after data showing a surprisingly sharp contraction in regional factory activity renewed fears of a US recession and more Federal Reserve rate cuts. Also, a weekly jobless claims report suggested the labor market was starting to strain from the slowing economy, leaving investors with no reason to buy the Dollar.
  • Peter Rosentreich, chief market analyst at ACM

    ACM - The Dollar slid against the Euro and Yen on Thursday after Federal Reserve Chairman Ben Bernanke said the US economic outlook had worsened and that the central bank would act as needed to support growth. In remarks to the Senate Banking Committee, Bernanke said falling home values, a softer job market and high energy prices are expected to hurt consumer spending in the short run.
  • Peter Rosentreich, chief market analyst at ACM

    ACM - The Euro dropped against the Dollar on Thursday after European Central Bank President Jean-Claude Trichet said euro zone growth risks are to the downside, paving the way for lower interest rates this year. The Euro is now on track for its biggest weekly decline against the Dollar in two-and-a-half years. It was pressured from early in the session as the ECB left benchmark borrowing costs unchanged at 4% and Trichet, at a post-meeting press conference, also dropped his threat to act ahead of possible rising prices.
  • Peter Rosentreich, chief market analyst at ACM

    ACM - UsdCad easily past parity as Nov. GDP m/m fell to 0.1% fueling speculation on the slowing economic conditions giving the cue to lower rates. With the GDP growth falling to .6% in the US we expect Canada's economic growth to follow suit.
  • Peter Rosentreich, chief market analyst at ACM

    ACM - The Dollar slid against the Euro on Thursday as tough inflation comments by a European Central Bank official and strong German business confidence data dashed hopes for a near-term interest rate cut in the euro zone. An improvement in investors' appetite for risk, following a sharp rebound in European stocks and gains in US equities, pushed down the Dollar versus high-yielding currencies such as the British pound and the Australian and Canadian dollars.
  • Peter Rosentreich, chief market analyst at ACM

    ACM - The Dollar retreated on Thursday after Federal Reserve Chairman Ben Bernanke told a congressional committee that more interest rate cuts may be necessary because the US economic outlook has worsened. Sharp losses in US shares have also weighed on UsdJpy after worse-than-expected results from brokerage Merrill Lynch reignited investors' aversion to risk.

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