While markets are generally in consolidation today, Euro is noticeably soft. EUR/CHF has another fall to as low as 1.4175. EUR/AUD and EUR/CAD dive to 1.4754 and 1.3065, way off last week's high of 1.5455 and 1.4710 respectively. EU unveiled its proposal for EU countries to form national funds to insure against future bank failures. The plan would be financed mainly by levies on banking industry. Separate national funds should also be part of an E.U. network. Some debate is expected among EU governments on the proposal but EU is hoping to gain enough endorsement to push it through G20 meeting at the end on June.

The Organization for Economic Cooperation and Development warned the many countries need to reconcile support to a still fragile recovery with the need to move to a more sustainable fiscal path, It said that the sovereign debt crisis has highlighted the need for the euro area to strengthen significantly its institutional and operational architecture to dissipate doubts about the long-term viability of the monetary union. Also, OECD urged Japan to develop a credible plan to scale back spending. UK is advised to embrace further fiscal consolidation as it's facing weak fiscal position and the risk of a significant rise in bond yields. But after all, OECD is optimist about global recovery. OEC raised growth forecast of it's 30 member countries to 2.7% this year, up from 1.9% predicted in November. Global economy is projected to grow 4.6% this year.

BoJ minutes for April 30 meeting was released today. The minutes showed that policy members share the view that it's necessary to strengthen the foundations for economic growth. However, some members are also concerned about the side effects of the easing in March which could harm smooth financial intermediation if lower interest rates squeeze banks' profits.

On the data front, US durable goods orders rose much more than expected by 2.9% in April but ex-transpotation orders dropped -1.0%. Japan corporate service price index dropped -1/1% yoy in April. Australia leading index rose 0.9% mom in Mach. German Gfk consumer confidence dropped from 3.8 to 3.5 in June.

EUR/AUD's fall from 1.5455 extends further with another fall to as low as 1.4754 so far. Further fall might be seen but we'd maintain the view that a medium term bottom is formed at 1.3927 already. Fall from 1.5455 is viewed as a correction only and should be contained by 61.8% retracement of 1.3927 to 1.5455 at 1.4511 and bring another rise. Above 1.5141 minor resistance will argue that such correction is finished and flip back back to the upside.

GBP/USD Mid-Day Outlook

Daily Pivots: (S1) 1.4302; (P) 1.4363; (R1) 1.4467;

Intraday bias in GBP/USD remains neutral as consolidations from 1.4230 continues. Nevertheless, another fall is still expected as long as 1.4527 resistance holds. Break of 1.4230 will confirm down trend resumption for 100% projection of 1.6456 to 1.4783 from 1.5521 at 1.3848 next. However, break of 1.4527 will suggest that a short term bottom is formed and bring stronger rebound towards 1.5053 resistance before staging another fall.

In the bigger picture, our bearish view remains unchanged. Fall fro 1.7043 is tentatively treated as resumption of the whole down trend from 2007 high of 2.1161. Such fall should target 61.8% projection of 2.1161 to 1.3503 from 1.7043 at 1.2310 after taking out 1.3503 low. On the upside, break of 1.5521 resistance is needed to be the first signal of bottoming. Otherwise, outlook will remain bearish.

Economic Indicators Update

GMT Ccy Events Actual Consensus Previous Revised 23:50 JPY BoJ Meeting Minutes -- -- 23:50 JPY Corporate Service Price Y/Y Apr -1.10% -- -1.10% -1.20% 00:30 AUD Westpac Leading Index M/M Mar 0.90% -- 0.50% 00:30 USD Fed Bernanke Speaks at BoJ Conference -- -- 02:00 USD Fed Plosser Speaks at BoJ Conference -- -- 06:00 EUR German GfK Consumer Confidence Jun 3.5 3.7 3.8 3.7 12:30 USD Durable Goods Orders Apr 2.90% 1.30% -1.30% -1.20% 12:30 USD Durables Ex Transportation Apr -1.00% 0.30% 2.80% 3.70% 14:00 USD New Home Sales Apr 420K 411K 14:30 USD Crude Oil Inventories 0.2M 0.2M