FX Highlights

  • USD is trading lower pressured by improving risk appetite as stocks and commodity prices extend Friday's gains, positive US housing data, strong EU industrial orders, rising UK consumer confidence and comments from a number the world's central bankers suggesting that the global recession is ending fuels demand for equities and higher risk assets, Fed's Bullard and the ECB's Nowotny see limited risk of double dip recession but global recovery to be slow
  • Economist Feldstein warns that the US faces new downturn, economist Roubini says there is a big risk of double dip recession, despite today's equity market surge uncertainty about the global recovery limits USD downside
  • Focus turns to today's release of Chicago Fed Index and Canadian retail sales, investors will be looking at these reports for confirmation that the global economic outlook is improving
  • JPY trades lower pressured by speculation the global recession is ending, Nikkei trades sharply higher
  • Australia's new auto sales fall 6.9%, AUD higher
  • UK Q3 confidence indicator rises a record 4.8%, Sunday Times declares UK recession over as consumer confidence soars, GBP mixed
  • EU June industrial orders rise 3.1%, ECB President Trichet warns that the recovery road ahead will be bumpy and will not exit emergency stimulus soon, EUR mixed
  • Russian GDP rises by 0.5%, falls 9.3% y/y
  • BBC reports that China reduced its holdings of US debt by 3% in July by the largest margin in nine years according to US TIC data
  • Bernanke says US on verge of recovery and worst of crisis is over, prospect for return to growth in near term appear good
  • Fed's monthly liquidity and credit report shows borrowing at the Fed declined in July, this suggests that liquidity programs are winding down
  • The Obama administration raised its 10 year deficit forecast to 9 trln from 7.1 trln, the forecast is line with the OMB
  • US equity markets set to open higher, European equities 1% higher, Nikkei closed 3.5% higher

Upcoming Events

  • US- Monday, Chicago Fed activity Index will be released
  • CAN- Monday, June retail sales will be released expected 0.2% compared to 1.2% last month