The Dollar-Yen pair was down more than 100 pips, as overnight losses that started in the European session continued in NY trading. The Dow Jones index was 200 points lower at 1 PM EST. The increase to risk aversion helped the Yen and the Swiss Franc. The Swiss Franc gained…
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Despite being triple-teamed by plunging stock prices, lower bond yields, and higher commodity prices the US dollar managed to escape the NY session relatively unscathed. EUR/USD opened the session near 1.5520 and promptly dipped towards 1.5490 on better than expected economic data out of the US. May ISM manufacturing came…
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Given the significant slowdown in domestic demand growth over the past months, the ISM index’s resilience has taken us by surprise - even when accounting for the positive impact from strong export demand and lean inventories. While we could be underestimating the positive effect from export and inventories, we still…
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The dollar tumbled after rating agency Standard & Poor’s downgraded various US financial sector firms. The euro hit session high at 1.5588 versus the dollar following the news. US data released earlier in the session were slightly above the expectations, but had little impact on the market. Manufacturing ISM rose…
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Below trend growth remains the story for manufacturing as the ISM index of manufacturing activity came in at 49.6, below 50 for the fifth time in the last six months. Orders and production improved while employment remains sub-par. Prices are an issue and suggest profit pressures. On the positive, rising…
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Total construction spending fell 0.4 percent in April, above the consensus of -0.6 percent. Spending in February was downwardly revised, while March was revised up to -0.6 percent. Residential spending declined 2.1 percent, however nonresidential continues to be a bright spot rising 0.7 percent.
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The RBA rate decision will be closely watched by traders as the central bank left the possibility of a rate hike after they were more hawkish than expected at their last meeting. The MPC had considerable discussion as whether to hike rates again after they paused in April as the…
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We have postponed our expectations of ECB rate cuts until 2009. Earlier we expected rates to be cut in 2008. However, inflation has yet again surprised on the upside, as commodity prices have continued to soar. Inflation will therefore remain higher for longer. We expect inflation to climb up gradually…
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Dealers remained conscience of the return of risk aversion, driven by Bradford and Bingley’s confirmation that it will restructure its recently announced rights offering. GBP probed below 1.9600, hitting two-week lows, while carry-related pairs were broadly lower. USD/JPY tested below 104.70 level, while EUR/JPY was over 160 pips lower at…
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The May ISM index surprised a bit on the upside with a rise to 49.6 from 48.6. The tone of the sub indices was generally improved, though many categories still remain under the 50-expansion/contraction threshold. The production sub index popped up above 50 for the first time since February. It…
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