Intraday Market Thoughts

Euro Post-Greece Paralysis at 1.31

by Patrik Urban
Mar 12, 2012 12:04

Markets consolidate; Chinese trade deficit expandst; German WPI declined; Italian GDP revised higher; Eurozone finance ministers meeting. Budget deficit is the only report due today. Fridays Premium trades include 2 new trades on EURUSD and 2 new on GBPUSD. See below for details. 2 new on AUDUSD, 2 existing trades on EURGBP 2 new on US crude oil

The markets are trading within a narrow range in the ongoing session, digesting the PSI deal, triggering of Greek CDS and positive US labor data. European equities are higher by about 0.25% and the relative strength winner is CAD.

Last week, AUD and NZD were under pressure on the back of Chinese growth concerns. This week, China once again impacted sentiment as it reported a trade deficit in February of USD 31.5 bln from previous trade surplus of USD 27.3 bln. New Year largest trade deficit in 22 years is partially blamed on distortion due to lunar new year so it will be interesting to see next month's data.

On the European data front, German WPI rose 1% in February from previous 1.2% which is 2.6% from 3% y/y. Italian final Q4 GDP was confirmed at -0.7% q/q but improved to -0.4% from -0.5% y/y.

Eurozone finance ministers are meeting today to sign the release of the second Greek bailout. No obstacles are expected but risk appetite is not likely to improve on the signing as there is already a talk of a need for a third bailout.

USD could be underpinned this week as the expectation for additional FED easing recedes and the FOMC that meets on Tuesday will have to acknowledge improving fundamentals.

The only report that is due during the NY session is federal budget deficit that is expected to widen to USD 234 bln in February from previous USD 222.5 bln. The treasury will release it at 2 pm NY time.

There is a potential for CAD volatility at 12:30 pm NY time when BOC deputy governor Tiff Macklem speaks in Sao Paulo.

Please note that for the next two weeks the difference between NY time and London/GMT time is 4 hours instead of the usual 5 hours.

Fridays Premium trades include 2 new trades on EURUSD and 2 new on GBPUSD, 2 new on AUDUSD, 2 existing on EURGBP 2 new on US crude oil. For direct access to those trades and USDJPY warnings/ Jobless Techs, please click here: Non subscribers click here:


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