- Fed’s Bullard: Change in Fed funds rate depends on how U.S. economy recovers. Now is not the time to continue normalising the discount rate
- China Foreign Ministry; Yuan exchange rate not cause of sino-U.S. trade imbalance. U.S. politicians should focus on solving own economic problems, not accusing others
- Australian central bank revises up 2010 GDP forecast to 1.6% from 1.2%, 2011 to 1.8% from 1.6%
- ECB’s Nowotny: Budget cuts have short term cost for economic growth, but important for long-term sustainability
- Euro zone April industrial output +0.8% m/m, +9.5% y/y, stronger than median forecasts of +0.5%, +8.7% respectively
- U.K’s OBR: 2010/2011 PSNB seen as 155 bln vs 2010 budget forecast of 163 bln. Borrowing profile slightly lower from 2010/11 to 214/15 than in March budget
- Fed’s Bullard: Global recovery looks very strong, unlikely to be derailed by euro zone crisis
- German Govt sources: See no indication Spain will apply to tap European aid mechanism
General risk sentiment is in OK shape at thre start of the week, European stocks firmer while oil has tacked on about one and a half bucks. Against this backdrop USD and yen have given ground.
EUR/USD is up at 1.2235 from an early 1.2175 having been as high as 1.2258. Talk of decent sell orders, said to include fund, sovereign interest, lying up at 1.2270/80 with further stops through 1.2285.
Cable up at 1.4725 from early 1.4605, having been as high as 1.4753. The first OBR forecasts came and went, and with EUR/GBP at .8310 effectively unchanged post release, think it’s fair to say the market took the numbers in their stride.
USD/JPY at 91.75 effectively unchanged on the day, having run into sell orders above 92.00, but with EUR/JPY buying underpinning the spot rate The EUR/JPY cross is up at 112.25 from early 111.85 against the backdrop of OK risk sentiment.