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SINGAPORE, SINGAPORE -- (Marketwired) -- 04/30/13 -- In his Market Brief of The Week for 29 April, leading global foreign exchange trader, educator and author Mario Sant Singh - whose views are widely sought after in the Forex industry, focuses on the Q2 deterioration in confidence with the 10-year U.S. Treasury bill yield reaching its lowest level in 2013, and a possible ECB benchmark interest rate cut on the table.
Key Events to Focus On This Week
-- U.S. Conference Board (CB) Consumer Confidence Index-- China's Manufacturing Purchasing Managers' Index (PMI)-- UK Manufacturing PMI-- Institute for Supply Management (ISM) Manufacturing PMI-- Federal Open Market Committee (FOMC) Statement-- ECB Refi-rate and Press Conference-- U.S. Trade Balance-- U.S. Non-Farm Payroll (NFP) and Unemployment Rate-- Spanish Flash Gross Domestic Product (GDP)-- German & Euro Area labor data
Key Events Last Week
-- China's HSBC Flash Manufacturing PMI missed forecast, from 51.6 to 50.5-- German Manufacturing PMI lowered to 47.9 from 49-- Reserve Bank of New Zealand (RBNZ) kept Official Cash Rate (OCR) at 2.5% unchanged, tone shifted from dovish to neutral-- German Ifo decreased to 104.4 from earlier 106.7-- UK GDP beat forecast, hitting 0.3% QoQ-- U.S. GDP missed forecast in 1Q, staying at 2.5% QoQ-- No surprise from Bank of Japan (BoJ)
Economic Insights
Global Macro Update - We are finally in May
Recent global economic releases and confidence started deteriorating since the beginning of 2Q, putting the concern of "sell in May and run away" on the table. However, pricing has yet to reflect worries since volatility remains low.
To view Figure 1, please visit the following link: http://media3.marketwire.com/docs/fig1fxpr.jpg
Source: Bloomberg, FXPRIMUS
Thus, major currencies continue lacking correlation against the USD. Their respective fundamentals chose their direction so far:
To view Figure 2, please visit the following link: http://media3.marketwire.com/docs/fig2fxpr.jpg
Source: Bloomberg, FXPRIMUS
1. Lower Consumer Price Index (CPI) in Japan challenged the Bank of Japan's (BoJ) credibility, the Yen surged.2. Upbeat UK Gross Domestic Product (GDP) pushed its currency higher.3. The CAD strengthened on the crude price rally last week.4. The Euro lowered on the ECB's rate cut fears.
The 10-year U.S. Treasury bill yield reached its lowest level in 2013. Will it be an indicator of "risk off" moving forward?
To view Figure 3, please visit the following link: http://media3.marketwire.com/docs/fig3fxpr.jpg
Source: Bloomberg, FXPRIMUS
1. Weak U.S. data, including 1Q GDP, attracted fund inflow from equities.2. Coupon action size may get cut on the shrinking federal budget deficit.
ECB will likely cut interest rate for first time this year
Draghi's previous statement and hope from earlier this year might be taken back.
