Daily Market News 16 May 2011

Friday’s market movers

  • Germany GDP QoQ and YoY and EU GDP QoQ and YoY showed growth in the first quarter this year. Euro buoyed by the upbeat GDP data, trimmed losses against the Dollar and jumped back to the 1.43 level, picking up from the sharp declines on previous days.
  • US CPI came out with the opening of the US session in the afternoon which showed a mild increase of the inflation (YoY 3.2% and MoM 0.4%). In all cases the results slightly exceeded the expectations. Reuters/Michigan Consumer Sentiment Index rises to 74.2 in May from 69.8 in April. We saw US dollar strengthening massively against counterparts since then.
  • However, risk aversion in the session, mainly, supported the dollar further to the highest levels in a month; investors have seemed to rally around the dollar: the deep correction in commodities push the dollar strengthening. The Euro tumbled as low as 1.41 while the Sterling lost 1.63 dipping into 1.61 level.

Today’s market movers

  • EU Trade Balance is coming out with a negative market expectation, while CPI is predicted to remain in line with the previous. These will probably have little effect on the market since the main focus is on the Greek debt crisis and inflation control in the EU.
  • The US is going to have NY Empire State Manufacturing Index and Net Long-term TIC Flows, both of which are predicted to have an increase respectively. On the back of the strong dollars at the moment, it might support the US dollar if they are coming out as the prediction.