€
The euro came off vis-à-vis the U.S. dollar today as the single currency tested bids around the US$ 1.3125 level and was capped around the US$ 1.3335 level.  Traders continued to sell the common currency ahead of the long Easter holiday weekend.  European Central Bank member Provopoulos reported “It will take time for these unprecedented fiscal and monetary interventions to have a positive effect.” Regarding the possibility the ECB will undertake “unconventional” policy options, he added “The ECB's interventions with respect to the non-conventional measures are decided each time after careful evaluation under prevailing circumstances.  The assessment of the type and scale of such interventions is based on the basic criterion of whether the benefits will reach the end-user, in other words households and businesses." ECB President Trichet reported “one can imagine further interest rate cuts.”  Data released today saw German industrial production off 2.9% in February and off 20.6% y/y.  Also, German final March consumer price inflation was off 0.1% m/m and up 0.5% y/y.  The ECB’s monthly bulletin reported “There may be stronger than anticipated positive effects due to the decrease in commodity prices and to policy measures taken.  There are concerns that the turmoil in financial markets could have a stronger impact on the real economy, as well as that protectionist pressures could intensify and that there could be adverse developments in the world economy stemming from a disorderly correction of global imbalances.” In U.S. news, weekly initial jobless claims were off 20,000 to 654,000 while continuing jobless claims weer up 95,000 to 5.84 million.  It was also reported that February import prices were up 0.5% m/m and off 14.9% y/y, the largest annualized decline since 1982.  Additionally, the February trade gap fell more than expected, printing at –US$ 25.97 billion from January’s print of –US$ 36.20 billion.  Traders are expressing some optimism with the current round of corporate Q1 earnings including Wells Fargo’s US$ 3 billion profit in Q1.  Euro bids are cited around the US$ 1.3100 figure.

¥/ CNY
The yen depreciated vis-à-vis the U.S. dollar today as the greenback tested offers around the ¥100.55 level and was supported around the ¥99.65 level.  Data released in Japan overnight saw February core machinery orders unexpectedly climb +1.4% m/m, the first improvement in five months.  Also, March machine tool orders were up +7.7% m/m and off a staggering 84.5% y/y.  The Nikkei 225 stock index climbed 3.74% to close at ¥8,916.06.  U.S. dollar offers are cited around the ¥104.15 level.  The euro moved lower vis-à-vis the yen as the single currency tested bids around the ¥131.85 level and was capped around the ¥133.50 level.  The British pound moved higher vis-à-vis the yen as sterling tested offers around the ¥148.00 figure while the Swiss franc moved lower vis-à-vis the yen and tested bids around the ¥86.55 level.  The Chinese yuan depreciated vis-à-vis the U.S. dollar today as the greenback closed at CNY 6.8340 in the over-the-counter market, up from CNY 6.8320.

₤
The British pound came off vis-à-vis the U.S. dollar today as cable tested bids around the US$ 1.4585 level and was capped around the $1.4780 level.  Bank of England’s Monetary Policy Committee kept its main Bank rate unchanged at 0.5% today and agreed to keep injecting ₤75 billion in new liquidity into the economy.  This represented the first time in seven months the MPC did not change policy.  The Bank is expected to continue purchasing assets for the next two months.  Data released in the U.K. today saw March output producer prices climb 0.1% m/m and 2.0% y/y, the weakest rise since July 2007. Core output prices were up 0.2% m/m and 3.3% y/y and input prices were up 1.0% m/m.  It was also reported that the February trade balance printed at -₤7.3 billion.  Cable bids are cited around the US$ 1.4515 level.  The euro came off vis-à-vis the British pound as the single currency tested offers around the ₤0.8960 level and was capped around the ₤0.9085 level. 

SCHEDULE

Thursday, 9 April 2009
all times GMT
(last release in parentheses)

N/A NZ  March PMI (38.6)
N/A NZ  March REINZ house sales (-17.7%)
0100 Australia April consumer inflation expectations (2.2%)
0130 Australia March employment change (1,800)
0130 Australia March unemployment rate (5.2%)
0545 CH  March unemployment rate (3.4% m/m)
0545 CH  March unemployment rate (3.1% y/y)
0600 Germany March consumer price index (0.6% m/m)
0600 Germany March consumer price index (1.0% y/y)
0800 Italy  February industrial orders
0800 Italy  February industrial production
0830 UK  March PPI, input (0.6% m/m)
0830 UK  March PPI, input (0.5% y/y)
0830 UK  March PPI, output (0.1% m/m)
0830 UK  March PPI, output (3.1% y/y)
0830 UK  March PPI, output core (0.0% m/m)
0830 UK  March PPI, output core (3.7% y/y)
1000 Germany February industrial production (-7.5% m/m)
1000 Germany February industrial production (-19.3% y/y)
1100 Canada  March unemployment rate (7.7%)
1100 Canada  March employment, net change (-82,600)
1100 UK  Bank of England interest rate decision
1230 US  February trade balance (-US$ 36.0 billion)
1230 US  March import price index (-0.20% m/m)
1230 US  March import price index (-12.80% y/y)
1230 US  Weekly initial jobless claims
1230 US  Continuing jobless claims
1230 Canada  February international merchandise trade (-C$ 1.0 billion)
1230 Canada  February new housing price index (-0.6% m/m)
2350 Japan  Bank of Japan Policy Board meeting minutes
2350 Japan  March bank lending (4.4% y/y)
2350 Japan  March M2+CFD money supply (2.1% y/y)

Friday, 10 April 2009
all times GMT
(last release in parentheses)

N/A Germany March wholesale price index (-0.1% m/m)
N/A Germany March wholesale price index (-5.7% y/y)
0645 France  March consumer price index (0.4% m/m)
0645 France  March consumer price index (0.9% y/y)
0650 France  February industrial production (-3.1% m/m)
0650 France  February industrial production (-13.8% y/y)
0650 France  February manufacturing production (-4.1% m/m)
0650 France  February manufacturing production (-16.5% y/y)

DISCLAIMER: GCI’s Daily Market Commentary is provided for informational purposes only. The information contained in these reports is gathered from reputable news sources and is not intended to be used as investment advice. GCI assumes no responsibility or liability from gains or losses incurred by the information herein contained.

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