Archived IMT (2011.04.20)

US earnings boost risk with Apple on the way, Aussie hits new highs, Japanese surplus shrinks, euro buoyed by ECB rate expectations but may be undermined by Spanish 10 yr bond auction, BoE minutes and UK public finances data may weaken sterling, Gold and silver surge.

Risk has returned in a big way in the last 24 hours after positive earnings out of the US saw Wall Street finish higher, while after the bell Intel and IBM beat expectations, paving the way for Apple later today where expectations for Q2 earnings expected to have grown to $5.36c a share.

The Australian dollar rose to its highest post float levels overnight after import and export prices came in above expectations (which were previewed in the orior IMT) increasing the likelihood of firmer rates to combat inflation in the coming months. The weak US dollar and surging gold prices also didnt hurt it either.

Unsurprisingly Japanese exports slipped back after last months earthquake, Nonetheless, the fall was double expectations, coming in at 2.2%, with further declines likely, as the countrys trade as the surplus shrank from 327.5bn yen to 96.3bn yen, pushing the yen lower overnight. Key support remains near this weeks lows and the post intervention highs at 82.10.

The euro continues to remain largely immune to sovereign debt concerns paring Mondays losses on future rate rise expectations in the face of positive German PMI data yesterday and factory gate prices due this morning.

Todays Spain 10-yr bond auction could well see upside limited however as Spain looks to auction EUR 6bn of ten and fourteen year paper in the face of 10 year yields near record highs above 5.5%, and these fears of a Greek default have brought Spains fiscal problems back into play. EURUSD resistance around 1.4380 re-targets the highs around 1.4520 as well as 2010 highs at 1.4580.

Today's Bank of England minutes arent expected to contain any surprises with the same trio of Sentance, Weale and Dale, voting for a rate increase. UK public finances for March are also expected and due to it being the last month of the tax year Public Sector Net Borrowing is expected to have increased from February's 10.3bn to 18.7bn, however the figures are expected to come in under the Chancellors annual borrowing forecast of 146bn.

EURGBP has resistance around 0.8810/20, with a break above targeting 0.8870, while a failure above 0.8810 retargets this weeks lows at 0.8740.

US existing home sales for March are expected to have risen 2.5% improving from Februarys decline of 9.6%.

Gold broke $1,500 on US debt concerns, targeting a break of $1,550, while silver hits $44 another 31 year high, as it looks to retest its 1980 peaks just shy of $50.

By KM AshrafLaidi.com Staff