US Morning Notes - USD & JPY higher, CIT will not get more government help

 @ibtimes on July 16 2009 8:10 AM

FX Highlights

  • Optimistic view of second quarter corporate earnings and upbeat FOMC economic outlook fuels equity market gains and USD losses, stocks at one month high USD at one month low, report that CIT will not receive more government help and could file for bankruptcy as soon as Friday sparked safe haven demand for the USD and JPY, better than expected Chinese Q2 GDP and better than expected earnings at J.P. Morgan helped to offset the CIT news, equity markets are trading mixed and USD remains range bound, commodity currencies pressured by Fitch downgrade of New Zealand's debt rating, report of record RBA intervention and a slight dip in risk appetite in reaction to the CIT news, focus turns to today's release of US jobless claims, Philly Fed and NAHB index
  • The FOMC upgraded its forecast for US GDP at the June policy meeting and projected higher unemployment and inflation, risk appetite improves supported by better than expected US earnings reports
  • CIT will not receive government help, CNBC reports that CIT could file for bankruptcy Friday, US Treasury says bankruptcy is not a foregone conclusion
  • China's Q2 GDP rises 7.9%, a 7.7% rise was expected, Yuan flat
  • RBA sold record A$1.94 bln in June to limit AUD gains, Fitch downgraded New Zealand's debt rating to negative from neutral, AUD and NDZ lower
  • IMF says Japan's economic outlook uncertain despite stabilization, inflation to remain negative until 2011, improved risk appetite may reignite carry trades, Japan's May tertiary index falls 0.1% to 96.4, July Reuters tankan manufacturing index -43 compared to -50 last month, JPY higher
  • Swiss July ZEW investor sentiment flat compared to 9.7% last month, CHF lower
  • UK PM Brown says his priority is to promote growth and restore jobs to the economy, BOE's Barker says she does not expect to see improvement on bank lending yet, GBP lower
  • US mortgage foreclosure filings rise to a record 1.5 million in the first half of 2009
  • US equity markets set to open slightly lower, European equities mixed, Nikkei closed 74 points higher

Upcoming Events

  • US- Thursday, initial jobless claims for week ending 7/11 will be released expected at 585k compared to 565k last week along with the July Philly Fed expected at -5 compared to -2.2 last month, July NAHB expected unchanged at 15 and May Treasury capital flows
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