FX Highlights

  • USD is trading lower pressured by improving risk sentiment as equity markets rise in Europe and the US in reaction to better earnings reports at Intel, Goldman Sachs and Johnson & Johnson, commodity currencies rise on improving optimism about the global recovery and rising price of crude oil, focus turns to today's release of US CPI, industrial production, capacity utilization Empire Manufacturing survey and FOMC minutes
  • BOJ holds rate policy steady as expected, extends quantitative ease for three months, forecasts GDP to fall 3.4% in 2009 with core CPI at -1.3%, BOJ s Shirakawa says fund conditions are improving JPY lower
  • PBOC's Yong says China should not reduce US treasury holdings until the US economy recovers, the PBOC makes small move to tighten policy
  • BOE's Bean says the BOE will decide whether quantitative ease needs to be expanded at the next monetary policy meeting
  • UK average earnings rise 2.3%, June claimant count rises 23.8K the unemployment rate rises to 0.2% to 7.6%, UK quarterly job losses at a record level, GBP higher
  • EU June inflation rises 0.2%m/m and falls 0.1%y/y, ECB's Constancio says interest rates are at appropriate level, EUR higher
  • Swiss May retail sales fall 1.4%, CHF higher gains limited by central bank sales
  • US equity markets set to open sharply higher, European equities 2% higher, Nikkei closed 7points higher

Upcoming Events

  • US- Wednesday, July Empire Manufacturing survey will be released expected at -5 compared to -9.41 last month along with June CPI expected at 0.6% with core rate expected at 0.1%% and June industrial production and capacity utilization , Industrial production is expected to fall 0.6% and capacity utilization is expected at 67.9 compared to 68.3 last month, FOMC minutes will also be released later in the day
  • Can- Wednesday, May Manufacturing shipments will be released expected at -2.5% compared to -0.1% last month