Market Review April 23 2012

Apr 23 • Market Reviews • 4262 Views • Comments Off on Market Review April 23 2012

Economic events scheduled for today

01:30:00   AUD   Producer Price Index (QoQ)   0.30%
The Producer Price Index released by the Australian Bureau of Statistics measures the average changes in prices in the Australian markets by producers of commodities. Changes in the PPI are widely followed as an indicator of commodity inflation. A high reading is seen as positive (or bullish) for the AUD, whereas a low reading is seen as negative (or bearish).

06:00:00   GBP   Nationwide Housing Prices   -0.90%
The Nationwide Housing Prices shows the value of the houses prices in UK and indicate current movements in the housing market that is considered as a sensitive factor to the UK’s economy. A high reading is seen as positive (or bullish) for the GBP, while a low reading is seen as negative (or bearish).

07:28:00   EUR   Purchasing Manager Index Manufacturing   48.4
The Manufacturing Purchasing Managers Index (PMI) released by the Markit economics captures business conditions in the manufacturing sector. As the manufacturing sector dominates a large part of total GDP, the manufacturing PMI is an important indicator of business conditions and the overall economic condition in Germany. Normally, a result above 50 signals is bullish for the EUR, whereas a result below 50 is seen as bearish.

 

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Euro Dollar
EURUSD (1.32.18)
The euro was on track for its best weekly performance since February on Friday after better-than-expected German business sentiment data but gains may fade next week as Spain’s finances and the French presidential election become the focus.

The euro also got a boost after a Group of 20 official said the G20 would pledge to increase the International Monetary Fund’s resources by more than $400 billion to fight the European debt crisis. Spanish 10-year government bond yields, however, topped 6 percent for a third time this week, which could keep the euro constrained within the $1.30-$1.32 range.

In late afternoon New York trading, the euro was up 0.6 percent at $1.3216, having hit a two-week high of $1.3224 after setting off stops above $1.3209. For the week, the euro was up 1.1 percent, on track for its largest weekly gain since Feb. 26.

Germany’s Ifo survey was the clear catalyst for the euro’s earlier gains, with its business climate index rising to 109.9 in April versus a forecast of 109.5.

The Sterling Pound
GBPUSD (1.61.23)
Sterling hit a 5-1/2-month high against the dollar after strong UK retail sales data doused faint expectations of more monetary stimulus by the Bank of England. The British pound was last at $1.6131, up 0.5 percent.

Asian –Pacific Currency
USDJPY (81.52)
While no dramatic shift is expected, investors will also be watching the statement on Wednesday after a two-day Federal Reserve policy meeting for clues on the U.S. economic outlook. Weaker-than-expected U.S. data and expectations of more monetary easing from the Bank of Japan next week has left investors reluctant to sell the euro aggressively against the dollar or yen.

The yen hovered close to its lowest levels against the dollar in 10 days after Bank of Japan Governor Masaaki Shirakawa said the central bank would continue powerful monetary easing until a 1 percent inflation target is in sight.  His words reinforced expectations the bank will ease policy further at its April 27 meeting.

The dollar stood at 81.55 yen, bringing its April 10 peak of 81.85 yen into focus. The euro hit a 2-week high of 108 yen, and was last at 107.80, up 0.5 percent on the day and well up from Monday’s two-month trough.

Gold
Gold (1643.03)
Gold rose towards $1,645 an ounce on Friday as a better-than-expected German business sentiment survey lifted the euro versus the dollar, but trading was light as investor’s awaited further news on the eurozone crisis and US monetary policy.

Spot gold was up 0.1 percent at $1,643.03 an ounce at 1010 GMT, while US gold futures for June delivery were up $3.00 at $1,644.40. Prices are set to fall 1 percent this week despite holding within their narrowest weekly range in more than a year.

But gold is struggling for direction as buyers await the outcome of International Monetary Fund and World Bank meetings this weekend, at which plans to tackle the eurozone debt crisis will be discussed, and a US Federal Reserve meeting next week.

Crude Oil
Crude Oil (104.08)
Crude prices rose on Friday, supported by buoyant European stock markets as investors drew comfort from a successful Spanish bond auction. Brent North Sea crude for June gained 54 cents to $118.54 per barrel in London midday deals. New York’s main contract, West Texas Intermediate (WTI) crude skyrocketed at the end of the day to $104.08 a barrel.

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