Joel is out of the office and will be returning on the 8th of July
Price action has remained very uncertain so far in Europe and is therefore subject to change quickly in any direction. Trade has been slightly risk averse as equities and higher yielding FX re-trace some of their hefty gains notched up yesterday.
Relative Performance Versus the USD on Wednesday (as of 10:45GMT) -
The dollar has made some gains versus members of the Euro bloc as worries over the EMU stress tests begin to take their toll. It does appear that focus has shifted from sovereign debt to global recovery prospects alleviating some of the pressure on the euro.
In Germany, reports have come out that the cabinet has officially rubber-stamped Eur80b in budget balancing measures over the 3-year period from 2011-2014. Details are not yet out regarding the measures, however speculation is rife about the impact of these austerity measures will have on the economic outlook.
Elsewhere, the European Commission has said this morning that the data coming from Greece is positive, the reform program is on track and fiscal consolidation is going according to plan. This came on the heels of ECB’s Provopoulos who said that the government is on target to cut the deficit to 8.1%/GDP by years end without implementing further measures.
Meanwhile, China’s SAFE
has said that the US Treasury
market remains an important one, but gold
will not become a major component of their FX reserves. Gold has already been badly beaten down over the recent session as banks and funds liquidate holdings in need of cash. In Japan
, the automaker group was out over-night calling on the government to take action to counter recent yen strength.
On the data front, the French trade balance came in worse than expected and Euro-zone GDP for Q1 came in as expected. German factory orders disappointed in the month-on-month reading but the year-on-year number remains solid negating the lower reading.
Looking ahead, US MBA mortgage applications are due at 11GMT followed by Canadian Ivey PMI (64.0 expected) at 14:00GMT wrapping things up for another light session on the data release front. US equity futures are pointing lower while commodities are diverging with crude trading mildly higher and gold weaker.
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