IFX Market Report for 18/04/2012

    150 150 Daniel Fountain
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    Sterling traded within a tight range against the euro on Tuesday, posting a high of 1.2148 against a low of 1.2102 as the pair failed to break the resistance and support levels of 1.2149 on the upside and 1.21 on the downside.

    GBPUSD traded within a 1 cent trading range on Tuesday, rallying from the lows of 1.5861 to post a high of 1.5969 on the release of the Consumer Price Index for the UK, which although showing a rise came out in line with expectations.

    Bank of England policy maker Adam Posen told reporters after a speech in London last night that the quickening pace of price rises in March hasn’t changed his view that inflation in the UK is on a downward trend. “If core inflation doesn’t come down on a sustained basis–then we have to rethink” Adding, a single month’s data isn’t enough to change his view.

    Market will pay particular attention to this morning’s release of the Bank of England’s meeting minutes from the interest rate meeting held earlier this month. Forecasts are that the voting pattern for interest rates will be 9-0 in favour of no movement, more significant will be the result of votes on quantitative easing. Worldwide
    Reports on Tuesday showed German ZEW economic expectations increased slightly in April, despite expectations for a minor fall. The economic expectations index rose to 23.4 in April from March’s unrevised 22.3.

    Consumer prices in the 17 countries that share the euro rose at a stronger pace in March than estimated earlier, final official data showed Tuesday posting a figure of 2.7% against a forecast 2.6%.

    In the much awaited Spanish bond auction on Tuesday, Spain sold €3.18bn in 12 and 18 month bills and their 10-year yield prices fell back below the 6% rate to 5.9%.

    EURUSD started trading around 1.3090 but rose to a day high 1.3172 after ZEW data and the successful Spanish bond auction boosted the euro.

    The Washington based ‘International Monetary Fund’ raised its global growth forecast for the first time in more than a year, with the US boosting the outlook while recent improvements remain “very fragile.” According to their report the world economy will expand 3.5% this year, compared with a January projection of 3.3%.

    The yen retreated from a six-week high versus the dollar of 80.84 after Bank of Japan Deputy Governor Kiyohiko Nishimura said the central bank is ready to implement additional easing if necessary, USDJPY rose to 81.38 as traders prepared for the intervention.

    The Swiss Government may appoint Thomas Jordan as President of the Swiss National Bank as soon as today, filling the post left vacant by Philipp Hildebrand after the scandal involving his wife betting on CHF movements.

    The US Department of Labor said it can’t promise journalists they will be able to transmit market-sensitive economic releases at exactly the same time under changes resulting from the first review of procedures in a decade. Under the current system, credentialed journalists in so- called lockups are given data in advance of their release to the public, allowing time to prepare stories, headlines and tables.

    To trade or for any other enquiry, please contact me on +44 (0)20 3005 8911.
    Jamie Lesinski
    Senior Dealer

    Daniel Fountain / 17.04.2012

    Editor, Hotel Designs


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