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XE Market Analysis: Asia - May 29, 2015

By: XE Market Analysis

The dollar was largely range bound in N.Y. trade on Friday, as it showed brief signs of strength following weak, but not as bad as expected Q1 GDP revisions. Gains were fleeting however, as a soft Chicago PMI weighed on the buck soon after. EUR-USD shuttled between 1.0955 and 1.1006 through the session, ultimately closing over the 50-day moving average of 1.0969. Read more

Updating the long leading indicators with Q1 corporate profits

By: New_Deal_democrat

With this morning's revised first quarter GDP, all 3 forward-looking components of that data have been released. In the preliminary report, real private residential investment was reported to have increased to a new post-recession high. That was confirmed this morning, and is consistent with the new highs in housing permits and starts that we saw in April, after February permits tied the previous November high. Gross Domestic Income is the opposite side of the ledger to GDP. Read more

XE Market Analysis: North America - May 29, 2015

By: XE Market Analysis

EUR-USD is firmer following Eurozone data. The high so far is 1.0989, and euro earlier pierced the 50-day moving average, which is presently sitting at 1.0969. EUR-JPY is trading at three-week highs near 136.00. Italian and Spanish HICP numbers came in higher than expected, the former at +0.2% y/y from -0.1% y/y in the harmonized figure, and the latter lifting to -0.3% y/y from -0.7% y/y. Read more

XE Market Analysis: Europe - May 29, 2015

By: XE Market Analysis

EUR-USD logged a new rebound high of 1.0974 in Asian trade, piercing the 50-day moving average, which is presently sitting at 1.0969. The 1.1000 and Monday's high at 1.1013 provide near-to upside markers. Today makes it the third successive up day after hitting a one-month low at 1.0819 on Wednesday. Read more

XE Market Analysis: Asia - May 28, 2015

By: XE Market Analysis

The dollar firmed up in N.Y. trade on Thursday morning, taking EUR-USD down to 1.0867, from 1.0950 highs in London. Despite the lack of Greece progress however, the pairing rallied back to match the overnight high in afternoon trade. USD-JPY made new highs, rallying over 124.45, though later falling back into 123.60 on Aso remarks, who voiced concerns over the speed of the yen's fall. Read more

XE Market Analysis: North America - May 28, 2015

By: XE Market Analysis

USD-JPY logged traded at its highest since 2002, the AUD took at hit on unambiguously weak Australian capital expenditure data, while a general euro rebound saw EUR-USD recoup to the mid-1.09s after leaving a one-month low at 1.0831 yesterday. An above-forecast Eurozone ESI confidence reading for May, of 103.8, aided the euro's rebound, even though the ECB stated in its latest Financial Stability Review that "sovereign risks emanating from Greece" had "increased sharply." USD-JPY logged a 12-year peak at 124.30 on the nominal price chart after taking out the June 2007 high at 124.16. Read more

XE Market Analysis: Europe - May 28, 2015

By: XE Market Analysis

USD-JPY logged the highest level since 2002, the AUD took at hit on unambiguously weak capital expenditure data out of Australia, while EUR-USD recouped to the 1.0900 area after leaving a one-month low at 1.0831 yesterday. There has been no change in the dominant bearish EUR-USD narrative: a continued lack of substantive progress in Greece's bailout negotiations with its creditors, and a dollar benefiting from the rekindled Fed tightening narrative. Read more

XE Market Analysis: Asia - May 27, 2015

By: XE Market Analysis

The dollar rallied in morning U.S. trade on Wednesday, and while there was no U.S. data to drive the market, a rebound on Wall Street helped sentiment to a degree. taking EUR-USD to trend lows of 1.0820, as Greece concerns remained front and center. USD-JPY meanwhile rallied to near eight-year highs, cracking the 124 mark, and coming within a few points of levels last seen in June of 2002. Read more

US inflation is all about house (rent) prices

By: New_Deal_democrat

Last Friday's consumer inflation report was something of a puzzle. Normally when producer prices decline, particularly as much as they did in April, consumer prices decline as well: The below avove just shows the last 6 years, but the same has obtained in prior periods, and in particular during the gas price swoon of 1986. The reason for the anomaly can be summed up in one word: shelter. Over the last year, consumer prices for everything except shelter (blue) have actually declined, while shelter costs have continued to increase at a brisk pace: g Here is the same graph shown YoY: Since shelter, measured as "owner's equivalent rent," is over 1/3 of the consumer price index, it is more than offsetting the decline in other prices. What is paticularly problematic is that the increase in shelter costs isn't being driven by brisk demand -- after all, the average Millennial would find it almost impossible to purchase the average house -- but rather by a shortfall in supply, as housing inventory remains low by historical averages, and construction of apartments and condominiums has not taken up enough of the slack, driving rents to new highs as a percentage of income. Since this is the main driver of core inflation, this is yet another reason why the Fed shouldn't be thinking about raising rates any time soom. Read more

XE Market Analysis: North America - May 27, 2015

By: XE Market Analysis

EUR-USD settled around 1.0900 after an early London run higher stalled at 1.0919, which seems to be tell-tale price action of bearish market sentiment. Yesterday's low at 1.0863 remains in scope. EU's Junker suggested Greece may be given more time, but, of course, time is not the problem, rather the seemingly intractable differences between Athens and Greece's creditors is. Read more

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