Intraday Market Thoughts

Archived IMT (2010.05.07)

by Ashraf Laidi
May 7, 2010 17:49

GBP RECOVERS ON DAVID CAMERONs offer to the LDP to form a coalition and build a majority government. If a deal goes through between these two diametrically opposed parties (Conservatives with Liberals), we expect the pound to garner further gains towards $1.53s even though passing policies would be complicated by the demands and conditions required by the Liberal Democrats. In anticipating further volatility ahead for today and next week, we see AUD bounces to be shortlived, with particular focus for more upside in GBPAUD and GBPNZD towards 1.69 and 2.0850. GERMANY PASSED the bill on Greek aid, helping to break euro high above 1.27. Rumours of ECB liquidity injections have not been confirmed but these are likely to materialize in the form of system-wide liquidity as opposed to country-specific aid (Greece) from the central bank.


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