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The USD established was softer versus the JPY and EUR, and was more flat-to-mixed against other currencies. USD-JPY broke below the Mar-3 low to make a three-month low of 101.10. EUR-JPY and other yen crosses were also lower as the yen followed its usual inverse correlation with risk appetite, as weak house price data out of China fed slowdown concerns in Asia's biggest economy. Read more
The yen posted gains during the PM session in Tokyo amid a developing risk aversion theme as weak house price data out of China fed slowdown concerns in Asia's biggest economy. The Nikkei stock index was showing a 0.6% decline in late session, while Australia's ASX 200 closed 1.2% for the worse, while the broad MSCI Asia Pacific index was indicated with a 0.4% decline. Read more
This monthly data for April included new post-recession highs for housing permits and starts, positive NY and Philly Fed manufacturing readings, and slightly positive retail sales. On the other hand, both producer and consumer inflation ran hot, meaning real retail sales were negative (but March was revised higher), University of Michigan sentiment turned down, and both industrial production and capacity utilization turned down sharply (partly due to a steep decline in utility usage after the unusually severe winter). My weekly report on the high frequency weekly indicators is meant to provide an up-to-this-week snapshot of the economy. Read more
Let's start by looking at the good news coming from Japan: the corporate CPI index increased 4.1% Y/Y and 2.8% M/M. This is very good news on the inflation front, indicating that price gains are starting to take hold. In addition, machine tool orders increased 48.8% Y/Y, indicating the businesses are starting to retool as a result of consumer demand. Read more
FX trade was fairly uneventful in N.Y. on Friday, with narrow ranges holding up overall. Better than expected housing starts, was offset by a softer Michigan sentiment outcome later, though neither report had much dollar impact. EUR-USD traded under 1.3700 early in the session, though recovered briefly toward 1.3720 before settling into the 1.3700 area. Read more
EUR-USD was knocked back below 1.3700 after giving a weak rebound in early London trade, which saw the euro stall at 13727, five pips shy of yesterday's peak. Price action remains clearly bearish. Yesterday's three-month low at 1.3648 is back in scope, though interbank and short-term speculative participants will be trending careful due to the risk of a pre-weekend short squeeze following a bearish week. Read more
The dollar was mostly lower in N.Y. trade on Tuesday, as risk-off trade dominated. A 7-year low in jobless claims, better Philly Fed and N.Y. Fed indices outcomes were offset by a miss in industrial production, hotter core CPI and a weaker NAHB housing market index. Read more
With the report of April consumer inflation this morning at +0.3%, we now know that April real retail sales declined by -0.2%. This is a true mixed reading. While April declined, the upward revision to March retail sales means that month increased by +1.2% in real terms. Read more
EUR underperformance and USD outperformance was the main show in town once again. EUR-USD extended to a near three-month low of 1.3756. The euro also fell against other currencies, with EUR-JPY logging a two-month low of 139.10, for instance. The last down-leg in the euro was a delayed reaction to weaker than expected preliminary Eurozone Q1 GDP, which didn't initially prompt an FX reaction having been portended by the unexpected contractions in the earlier released national figures out of Italy and Portugal. Read more
USD majors posted narrow ranges during pre-Europe Asian trade. EUR-USD flat-lined around 1.3710-20, as it did for most of Wednesday. USD-JPY saw a brief dip to a low of 101.66 following a much stronger than expected initial estimate of Japanese Q1 GDP of 5.9%, though this was evidently driven by a surge of big ticket consumer purchases ahead of the sales tax hike in April. Read more
