Intraday Market Thoughts

USD Slips Ahead of GDP, BoJ as expected

by Patrik Urban
Apr 27, 2012 13:01

BOJ raised new QE as expected; GfK consumer sentiment declined; Spanish unemployment rate rose; Swiss KOF economic barometer rose. Traders await US ٍ GDP and core PCE. For those triple charts on EURUSD/GOLD/APPLE, see link below.

USD trades lower across the board. European equities are only slightly changed and the relative strength winner is NZD followed by AUD.

The BOJ decided it will increase asset purchases by additional JPY 10 trillion ($124 bln) while reducing its fixed rate fund supplying program by JPY 5 trillion leaving the new net stimulus at JPY 5 trillion. JPY initially gained, only to spike lower a few minutes later. JPY buyers reversed the course once again and JPY currently trades near session highs against other majors. USDJPY is around 80.65.

GfK German consumer sentiment declined for May to 5.6 from April's 5.8 as high fuel prices continue to plague end users. The willingness to buy and the income expectation sub indices declined as well but the economic expectations index rose.

One day after Spain's two notch S&P downgrade the unemployment rate rose to the highest level in the Eurozone. In Q4 the unemployment rose to 24.44% compared to 22.85% in Q3. The 10 year yield trades higher on the day around 5.95%. EURUSD is likely to have a hard time advancing further but continues to be resilient and trades around 1.3230.

Swiss KOF economic barometer rose in April to 0.40 from previous 0.09. Later during the session, the SNB chairman Jordan reiterated that the SNB will maintain the 1.20 EURCHF floor, that the CHF is still overvalued at current levels and that the SNB is ready to take further measures anytime as needed.

The key event for the NY session is Q1 GDP that is due at 8:30 am ET which is seen lower at 2.5% from previous 3.0%. GDP price index is anticipated higher at 2.3% from 0.9% and core PCE at 2.1% from 1.3%.

The revision of UoM consumer sentiment is due at 9:55 am ET and a revision higher to 75.9 from 75.7 is expected.

XXXXXXXXXXXXXXX See Ashrafs TripleCharts XXXXXXXXXXXXXXX on EURUSD, Gold and Apple, posted in Wednesdays Pre-FOMC insights

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