Daily Market News 10 June 2011

Yesterday’s Market Movers

  • UK Trade Balance and Goods Trade Balance came out worse than the previous and expectation. We had sterling dropped off 1.6450 level to start the day. Another big factors for Sterling weakness is BoE Interest Rate Decision, which remained the interest rate unchanged at 0.5%. The markets are not expecting any movement of the rate until November this year, hence we saw GBP/USD been trading below 1.64 level since then.
  • ECB Interest Rate Decision came out unchanged as well, the rate will be at 1.25% at least till next month. The decision itself did not affect the rate as such but while Trichet’s speaking, we had Euro move massively against major counterparts. EUR/USD dipped down from 1.4650 to 1.4480, even worse than the dropping GBP/USD. Therefore, GBP/EUR picked up from 1.1230 to 1.1320, which is the high of the week.
  • The US Trade Balance had  a slightly better reading in the afternoon while Initial Jobless Claims came out worse than the previous and the expectation. The small data did not affect the market, the dollar against  sterling and euro remains strong since the Interest Decision makers are the main market movers on the day.

Today’s Market Movers

  • Today we will have the G8 meeting held in France, market is expecting this to support the French Chancellor be the IMF chief. What we might need they to discuss is probably how are they going to help the eurozone and control the world economy slowing down.
  • Germany CPI MoM and YoY came out this early morning this a slight decline from the previous and the market consensus. MoM is reading from 0.2% to 0% and YoY is reading from 2.4% to 2.3%. This indicated a little control of the inflation, however the whole EU CPI remain to see. Euro did not find any support from it, trading below 1.54 level, seeing a further risk aversion.
  • UK PPI Input and Output came out worse than before overall. The same happened to UK Manufacturing Production and Industrial Production. These figures in some extend are showing the UK economy growth slowdown is clear. GBP has been continuously dropping from the overnight 1.6280 figure.