€
The euro lost ground-à-vis the U.S. dollar today as the single currency tested bids around the US$ 1.3870 level and was capped around the $1.4000 figure.  Traders were unable to push the common currency above the psychologically-important US$ 1.4000 figure despite gains in U.S. equities markets and crude oil prices.  Many data were released in the U.S. today.  First, weekly initial jobless claims climbed 3,000 to 608,000 from a revised 605,000 while continuing jobless claims printed at 6.687 million from a revised 6.835 million the prior week.  The modest improvement in continuing claims and small rise in initial claims could be a positive for the troubled U.S. employment sector.  Second, the May index of leading indicators climbed 1.2%, above expectations.  Third, the June Philadelphia Fed index of manufacturing activity improved more than expected to -2.2 from -22.6 in May.  Traders are still talking about the government’s plan to enact major changes at the Federal Reserve, including adding the mandate to become a prudential systemtic risk regulator and reducing or taking away its consumer finance mandate.  In eurozone news, the German Chancellor Merkel pledged support for new rules on financial markets supervision and said they must be “common and binding.” The German government reported it plans to issue €310 billion in new debt through 2013.  Euro bids are cited around the US$ 1.3435 level.

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¥/ CNY
The yen depreciated vis-à-vis the U.S. dollar today as the greenback tested offers around the ¥96.70 level and was supported around the ¥95.60 level.  Bank of Japan and the Japanese government upgraded their assessments of the Japanese economy, lending credence to economists’ view the economy may have already bottomed out.  There are tentative signs that industrial production and the export sector are improving.  The central bank is expected to keep its overnight call rate target unchanged at 0.10% for the foreseeable future.  The Nikkei 225 stock index lost 1.39% to close at ¥9,703.72.  U.S. dollar offers are cited around the ¥104.15 level.  The euro moved higher vis-à-vis the yen as the single currency tested offers around the ¥135.00 figure and was supported around the ¥133.00 figure.  The British pound moved higher vis-à-vis the yen as sterling tested offers around the ¥158.45 level while the Swiss franc moved higher vis-à-vis the yen and tested offers around the ¥89.35 level. In Chinese news, the U.S. dollar weakened vis-à-vis the Chinese yuan as the greenback closed at CNY 6.8337 in the over-the-counter market, down from CNY 6.8360. 

₤
The British pound weakened vis-à-vis the U.S. dollar today as cable tested bids around the US$ 1.6185 level and was capped around the $1.6470 level.  Data released in the U.K. today saw CML May gross mortgage lending decline to ₤10.3 billion.  Also, May retail sales were off 0.6% m/m and 1.6% y/y, a stark contrast with April’s 0.9% m/m and 2.6% y/y increases.  Third, May public sector borrowing reached a record net ₤19.9 billion.   Fourth, the May CBI industrial trends survey rallied to -51 from -56.  Cable bids are cited around the US$ 1.6110 level.  The euro moved higher vis-à-vis the British pound as the single currency tested offers around the ₤0.8605 level and was supported around the ₤0.8490 level.

SCHEDULE

Wednesday, 17 June 2009
all times GMT
(last release in parentheses)

0030 Australia April Westpac leading index (0.30% m/m)
0130 Australia Q1 dwelling starts (-9.90%)
0500 Japan  Bank of Japan monthly report
0545 CH  June SECO economic forecasts
0600 Japan  May machine tool orders
0715 CH  April retail sales (1.20% y/y)
0830 UK  Bank of England MPC meeting minutes
0830 UK  May claimant count rate (4.7%)
0830 UK  May jobless claims change (57,100)
0830 UK  April average earnings
0830 UK  April ILO unemployment rate (7.1%)
0900 Eurozone April trade balance (€400 million
0900 Eurozone April construction output
0900 CH  June ZEW survey, expectations (-3.9)
1100 US  MBA mortgage applications
1230 US  May consumer price index (0.0% m/m)
1230 US  May consumer price index (-0.7% y/y)
1230 US  May CPI, ex-food and energy (0.3% m/m)
1230 US  May CPI, ex-food and energy (1.9% y/y)
1230 US  Q1 current account balance (-US$ 132.6 billion)
1230 Canada  May leading indicators (-1.1% m/m)
1230 Canada  April wholesale sales (-0.6% m/m)
1600 US  Federal Reserve Chairman Bernanke speaks

Thursday, 18 June 2009
all times GMT
(last release in parentheses)

0730 CH  Swiss National Bank interest rate decision
0800 Italy  April trade balance
0830 UK  May retail sales (0.9% m/m)
0830 UK  May retail sales (2.6% y/y)
0830 UK  May public sector net cash requirement (₤5.2 billion)
0830    UK  May public sector net borrowing (₤8.5 billion)
0830 UK  May M4 money supply
1100 Canada  May consumer price index (-0.1% m/m)
1100 Canada  May consumer price index (0.4% y/y)
1100 Canada  May Bank of Canada consumer price index, core (0.1% m/m)
1100 Canada  May Bank of Canada consumer price index, core (1.8% y/y)
1230 US  Weekly initial jobless claims (601,000)
1230 US  Continuing jobless claims
1400 US  May leading indicators (1.0%)
1400 US  June Philadelphia Fed manufacturing index (-22.6)
2350 Japan  Bank of Japan Monetary Policy meeting minutes

Friday, 19 June 2009
all times GMT
(last release in parentheses)

0600 Germany May producer prices (-1.4% m/m)
0600 Germany May producer prices (-2.7% y/y)
0645 France  Q1 wages
0800 Italy  Q1 unemployment rate
1230 Canada  April retail sales (0.3% m/m)
1230 Canada  April retail sales, ex-autos (-0.2% m/m)

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.

GCI Financial Ltd.