Asian markets saw a poor start following the New York sell-off as fears of a slowdown compound investor concerns over the European debt problems. Releases out of Asia however were moderately helpful as we saw Japanese Capital Spending for Q1 at 3.3% slightly better than expected to suggest pre-nuclear crisis optimism among Japanese business while from Australia we saw firm numbers as well. April Retail Sales came out at 1.1% month-on-month better than the 0.4% consensus as people begin to rebuild following the March flooding devastation in Queensland. Trade figures for March fell short of the consensus at AUD 1.60 billion against 2.07 billion forecasters were looking for though this is explained by the said flooding with future numbers likely to pick up as the mines have resumed operation since then. Going forward we have a largely clear European calendar the only thing of note being UK Construction PMI data which unlike manufacturing we expect should hold, the consensus at 53.7. From Germany we will be hearing from ECB Pres. Jean Claude Trichet though absent a policy setting we doubt we will hear something new. Still people are curious whether the bank is willing to soften its stance over a Greek ‘soft-restructuring’ as it becomes increasingly likely that the IMF will be withholding aid payments. Going forward we favor a stronger Aussy given the earlier release and commodities attempt to pick up even as EURUSD is also looking attractive with its bounce from the daily 1.4340.

©2011 FX Instructor Forex Blog - For Traders, By Traders. All Rights Reserved.