Intraday Market Thoughts

Onto Another Bernanke Lecture After Asia Showed Resistance

by Patrik Urban
Mar 27, 2012 12:51

Bernanke-fuelled rally in risk appetite faced resistance in Wednesday Asia. German GfK consumer confidence declined; French consumer confidence rose; German import prices rose; UK CBI sales lower; possible hike in EURCHF floor to 1.35. Market turns to SP Case Shiller index, CB consumer confidence and Richmond FED manufacturing. Mondays Premium trades include GBPJPY, EURUSD, USDCAD and AUDUSD, as well latest chart on EURUSD Golden Cross alert as well as global yields vs EURUSD. See below for detail.

The USD is mixed in the ongoing session. It is weaker against EUR, GBP, CHF and unchanged against the rest of the majors. European equities are higher by about 0.4%.

Throughout the Asian session, markets consolidated sharp USD losses caused by Bernanke's dovish comments. Once London traders got to their desks, they sent USD even lower across the board. However, the buck was able to erase a portion of its losses.

GfK German consumer confidence for April turned lower to 5.9 from 6.0 which is the first decline after six straight months of gradual increases. Record gasoline prices sent the income expectations sub index lower by 7 points to 34.3 which nearly negated last month's increase. Economic expectations were marginally higher and willingness to buy was virtually unchanged. The headline index refers to the following month but the sub indices refer to the current month.

In other news, French consumer confidence rose considerably in February to 87 from 82, German import prices rose 1% in February on higher oil prices and UK CBI realized sales were unchanged in March after previous -2.

Interesting comments came from Swiss economics minister Johann Schneider-Ammann who suggested in yesterday's TV interview that CHF cap could be raised to 1.35 1.40 level. EURCHF has been trading within 100 pip range over the past two months so higher volatility is likely in the days/weeks ahead.

The NY session will bring S&P Case Shiller house price index at 9:00 am which is expected to slow the rate of its decline in January to -3.8% from -4% followed by CB consumer confidence at 10:00 am which is seen slightly lower in March at 70.3 from 70.8.

Richmond FED manufacturing is also due at 10:00 am and it is anticipated lower at 18 in March from February's 20.

FED chairman Bernanke gives his third lecture at the George Washington University at 12:45 pm but this is unlikely to have any impact on the markets.

Mondays Premium trades included a revision in the EURUSD trades as well as on GBPJPY, USDCAD and AUDUSD. A chart alert on a possible EURUSD Golden Cross as well as global yields vs EURUSD. For DIRECT ACCESS to Today's Trades, click here: NOn-Subscribers, click here:


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