Releases from Europe:
 
April                                              Prior     Current
Bank of France Business Sentiment   105.0     101.0

Business sentiment has declined once again according to the Bank or France. However, they have found that April saw new orders edge higher but remain fairly subdued, inventories of final goods are close to targeted levels, but the outlook for activity in the coming months is subdued.

The CB raised its forecast for Q1 GDP by 0.2% to 0.6% and has issued its forecast of Q2 GDP at +0.3%.

The following economic releases are due today:

March        
Euro-zone Construction Output   (MoM)   +1.2%  (prior)
Euro-zone Construction Output    (YoY)   +4.3% (prior)

April
U.S. Leading Indicators                         - 0.1%

The week begins with the wind taken out of the sails of the Dollar bulls and what appears to be a more neutral attitude towards the Greenback.

Paulson is retaining his customary positive sales pitch but concentrating his comments on the improvement in the credit crunch and skirting around any mention of inflation and consumer confidence.

Across the Atlantic ECB officials retain their neutral stance (with a hawkish undertone) and insisting the level of inflation is much too high to consider interest rate cuts. This plainly contrasts the view offered by the BOE governor King last week who outlined that unless interest rates come down the economy faces a collapse of confidence with a resultant risk of recession.

There’s not much on the U.S. slate this week though the highlight is Wednesday’s FOMC minutes. The market is still clamoring to find out whether the Fed has ended it’s series of cuts and would love to jump on the back of any hint that the Fed may just reverse and begin to react to inflationary pressures and hike rates.

Frankly the likelihood of the Fed saying anything except: “credit conditions in the market are easing and the current policy reflects the balance between market pressures and inflation” is very low.

The German ZEW and IFO surveys provide the highlight though there is also a fair spread of industrial orders, and European manufacturing & services PMI to provide input from Europe.

The big change is that the market wants to be bullish Dollars but can’t find sufficient momentum from current known information and baring any surprises there is little chance anything will develop this week either.

This should keep the Dollar on a rather erratic downward path…

Note important support and resistance areas:

          USDJPY        EURUSD       USDCHF        GBPUSD
Res:  105.43-68    1.5692-37    1.0559-90    1.9712-64
Res:  104.49-98    1.5636-56    1.0495-25    1.9631-61

Spt:   103.51-85    1.5535-70    1.0395-30    1.9523-54
Spt:   102.80-30    1.5443-73    1.0335-71    1.9452-80

See Also

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