Apr 11 • Morning Roll Call • 1831 Views • Comments Off on MORNING ROLL CALL

Sterling bounces back versus U.S. dollar, which inches lower versus peers, U.S. equities flat, whilst European markets sell off between-the-lines1

In a relatively quiet day for major economic news releases, geopolitical tensions appeared to dominate the talk amongst analysts and investors on broadcast services such as: the F.T., Bloomberg and Reuters on Monday. Tensions relating to what possible move the USA can unilaterally take versus Syria, will no doubt be the major issue and topic of conversation as the G7 economic leaders meet in Lucca Italy, where protests regarding the summit took place on Monday evening.

Whilst all flights have been banned above Lucca, in order to protect the great and the good, presumably the protesting Italians are more interested in what the G7 can do for youth unemployment at 40%, rather than flights out of the area and the 57 tomahawk missiles being fired at a Syrian airbase at a cost of $100 million.

Early Monday morning Australia chipped in with some poor, yet interesting data; home loans fell by 0.5%, missing the forecast of flat growth, whilst investment lending fell by -5.9%, versus the previous month’s growth figure of 4.6%. Adding more hard data evidence to the beliefs of many analysts that Australia has peaked, in terms of economic growth over the short to medium term. The Aussie initially sold off in the Sydney/Asian session, but recovered versus its peers throughout the day, AUD/USD ending the day at 0.7503, close to Monday’s daily pivot point.

Yen increased versus the majority of its peers after poor Japanese economic data was released on Monday; bankruptcies have increased significantly, up 5.36% in March, from -4.84% in Feb. whilst Japan’s Eco watchers’ survey also missed the forecast. USD/JPY ended the day at 110.86, down circa 0.6% on the day, whilst EUR/JPY ended the day up at circa 117.45 and AUD/JPY up at 83.19.

The Loonie (the Canadian dollar), enjoyed significant gains versus its peers on Monday, aided by the data concerning house starts, which smashed expectations coming in at 253.7k on an annual basis, versus the forecast of 214.5k. This is the biggest monthly surge seen in Canada since 2007 and is principally due to condos being built. With prices currently up circa 35% YoY in Toronto, this extra capacity (if affordable), is obviously desperately needed. USD/CAD slumped to close out the day at circa 1.3323, EUR/CAD slipped to end the day at circa 1.4114, whilst CAD/JPY rose to circa 83.12.

USA equity markets closed flat on the day; SPX up 0.07%, DJIA up 0.01%. European markets sold off; STOXX 50 down 0.44%, DAX down 0.20% and France’s CAC down 0.54%, the tightening and looming French presidential election, created a nervous environment for French equity traders. Gold ended the day virtually flat at $1256 per ounce, after suffering a significant sell off on Friday. Silver also ended the day close to Monday’s starting daily pivot point, at $17.95 per ounce. WTI oil enjoyed another New York session gain, rising political tensions in the Middle East, a Libyan field out of action and Russia suggesting a cutback of production, all added to a circa one percent rise throughout the day, resulting in a combined 3.5% rise over the past three days’ trading sessions.

Economic calendar events April 11th, all times quoted are London (GMT) time.

08:30, currency impacted GBP. Consumer Price Index (YoY). The forecast is for the UK’s key inflation measure to remain unchanged at 2.3%. However, any unexpected miss could see sterling effected, if investors believe the UK’s BoE/MPC might raise the base interest rate as a consequence.

08:30, currency impacted GBP. Retail Price Index (YoY) (MAR). With UK wage rises stuck at circa 2% and CPI inflation rising, any rise above the current and expected forecast level of 3.2% for RPI, may be viewed as an extra reason for the BoE/MPC to raise interest the base rate, in order to cool both the key headline inflation measures.

08:30, currency impacted GBP. Producer Price Index Input n.s.a. (YoY) (MAR). The UK’s policy makers will be hoping that the recent rise in sterling versus euro and USD, will have helped to moderate input and import prices for producers and manufacturers. The forecast is for a print of 17.0%, from the 19.1% figure previously.

09:00, currency impacted EUR. Euro-Zone Industrial Production w.d.a. (YoY) (FEB). Europe’s policymakers will be hoping for the forecast of a 1.9% rise in production to be met, given the poor 0.6% reading delivered in Jan.

09:00, currency impacted EUR. German ZEW Survey (Economic Sentiment) (APR). A highly significant ‘soft data’ publication, the prediction is for a rise to 14.8, from 12.8 previously. A miss could impact on the value of the euro, versus its major peers.


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