Daily Market News 28 April 2011

Yesterday’s Market Movers

The only pieces of data from the euro zone yesterday were in the form of the GFK consumer continence figures and European industrial new orders. The GFK figures came in slightly lower than expected. And Industrial new orders figures did little to stop the recent surge in the euro over the last few months as the euro continues to trade at a 16 month highs against the greenback.

CPI from Germany was also released later on in the afternoon and both came in line with consensus both MoM and YoY. These figures were widely expected and like early in the day when GFK and Industrial new orders were released did little to slow down a in form euro.

The main data from the UK on Wednesday was in the form of GDP where market expectations were of a slight increase on the QoQ number after last year’s contraction which showed negative growth. These figures came in line with consensus with the QoQ at 0.5% and 1.8% on YoY which saw sterling gain across the board gaining over half a cent against the euro and nearly one cent against the US dollar.

In the United States we have two pieces of data firstly in the form of durable goods which were looking for an increase on last month’s figures. These figures did come in better than expected at 2.5% however had little impact on the greenback as many investors attention was turning to the FOMC meeting later on in the evening.

As widely expected the FOMC left their key bench mark rates unchanged last night at a record level of 0.00% to 0.25bps. Ben Bernanke’s comments following the decision didn’t go down to well with the US dollar trading as low as 1.6639 against the British Pound and 1.4797 in New York. The Fed remains committed to completing its $600bn QE programme and remained muted on a possible further round of QE 3. More bad news followed with the Fed now lagging behind the ECB and BoE on monetary policy this added to further US dollar weakness. Economic growth also remains a concern with the central bank readjusting its forecast on their 2011 GDP figures; it seems with all this negative data the US dollar will remain under further pressure within the next few days.

We only have one piece of data from the UK today in the form of Nationwide Housing Prices index. This is an important figure given the housing market has a big influence in the UK economy, any positive figures can only be seen as a good thing for sterling.

Data from the euro zone comes in the form of German unemployment; these figures are looking for a slight decrease from the month prior and would be seen as a euro positive however wouldn’t really be a big euro mover unless a really low figure is released.

The United States sees the busy of all three economies with three key pieces of data being released which will all have an impact on the greenback. Initial jobless claims is the first to be released with any figure below 403,000 claims being seen as a US dollar positive given that high unemployment and claims are a concern for the US government.

GDP follows Initial jobless claims and are looking for a drop from the last quarter of nearly 1.3% with a lower number being seen as a problem for the Federal Reserve.

Pending home sales is the final piece of data from the United States, with another drop in figures looking to come out. Being that the US housing market is very sensitive to the US economy this could possibly add to the recent dollar decline seen over the last few weeks.