Wednesday, May 13, 2015

Daily FX Update, 13 May 2015 OVERNIGHT MARKET UPDATE:

·         In US, the April NFIB Small Business Optimism survey rose to 96.9 vs 95.2 implying business expectations improved last month following the downshift in Q1. March JOLTS job openings fell marginally to 4.994m (Feb 5.144m), probably reflecting the weakness evident in the labour market that month. Echoing the deceleration in private consumption during Q1, the NY Fed’s household debt and credit report showed that growth in household debt was subdued in the quarter, rising a modest 0.2% or US$24 billion to US$11.8 trillion.
·         Bloomberg news reports that the ECB has agreed to raise the cap on Greece’s Emergency Liquidity Assistance by EUR1.1 billion to EUR80 billion. They also report that “a decision on whether to increase the discount on the collateral posted -- making it harder for banks to get the cash -- could still be made at next week’s council meeting in Frankfurt”. 
·         UK Industrial Production rose by a better-than-expected 0.5% m/m, with manufacturing output rising 0.4% m/m.
·         In absence of a broad USD trend individual stories dominated in the currency market. The AUD found solid support after the Budget, while the GBP rallied after more strong data there.    
·         Bond yields were higher in Europe, but lower US Treasury bond yield levels on screens in the morning session mask significant overnight volatility.       
·         Equity markets were downing in a sea of red ink, with all major US markets closing lower.                  
·         Crude oil prices firmed. Brent moved above the critical USD65/bbl level, while US WTI also rose above the USD60/bbl level of resistance. OPEC raised its 2015 consumption estimate in its monthly report, while the EIA suggested US shale output has fallen about 1% in May and declines will gather momentum in June, supporting sentiment.    
Gold led the precious metals complex higher, in choppy trading. Gold's strength was supported by weaker equities in Europe and the US and a steadily stronger Euro.

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