Posted by admin on June 3rd, 2008 at 09:16am
The market is waiting something onto which it can hang its hat
Releases from Europe:
Forecast Actual
May Swiss CPI (MoM) +0.4% +0.8%
May Swiss CPI (YoY) +2.4% +2.9%
In the only release from Europe so far Swiss CPI shocked to the upside with a 0.8% rise in May which took annual inflation to +2.9%. The rise was driven by housing, energy and transport and extended the period above the SNB’s 2% upper threshold to 5 consecutive months.
The following economic releases are due today:
Q1
Euro-zone GDP (P) (QoQ) +0.7%
Euro-zone GDP (P) (YoY) +2.2%
April
Euro-zone PPI (MoM) +0.8%
Euro-zone PPI (YoY) +6.1%
U.S. Factory Orders (MoM) - 0.1%
May
U.K. Construction PMI 45.8
The first interest rate decision of the week has passed and in spite of a robust rise in building approvals the RBA announced an unchanged policy which had been expected. The CB commented that the current policy was appropriate for now and expects inflationary pressures to abate with the economy now seeing signs of moderation evidenced by softening retail sales & credit growth data.
They made no hint of the timing of any future cuts which, while inflation remains at elevated levels, is unlikely to happen any time soon. The Aussie pulled back from its earlier gains but only below yesterday’s low will send it much lower.
As for the rest of the day, there is little for the market into which to sink its teeth. However, it’ll watch the combination of the provisional Q1 GDP from the Euro-zone along with PPI to vainly hope that the ECB may tighten its already hawkish stance. With some concern over the lowering of U.S. investment banks’ credit ratings there is potential for a lower Dollar.
However, two days before the ECB decision there is little appetite for aggressive moves and this should keep things subdued over the day.
Note important support and resistance areas:
USDJPY EURUSD USDCHF GBPUSD
Res: 105.50-86 1.5644-88 1.0425-49 1.9773-11
Res: 104.65-89 1.5588-15 1.0386-05 1.9677-95
Spt: 103.62-84 1.5460-85 1.0253-88 1.9566-96
Spt: 102.72-02 1.5385-09 1.0200-14 1.9478-98
Under Daily Forex Analyses
