TODAY FOREX IN REVIEWS

While risk-assets saw a slight rebound yesterday, fears about the effectiveness of stimulus measures are still running rampant in the market. The release of the Eurozone Manufacturing and Services PMI figures could highlight the contraction being experienced across the Eurozone as governments struggle to reinstate growth in stagnant economies. Spain, which has still refused to join the bailout table unless the terms are more accommodating, is scheduled to auction 10-year bonds later today as borrowing costs remain below 6%. Equity indices were marginally higher across the board, led by the 0.59% gain in the German DAX. The Euro Stoxx 50 and French CAC 40 were both higher, rising 0.56% and 0.54% respectively. EURUSD has ticked slightly lower to 1.3024.

New Zealand managed to eke out a beat in GDP expectations which contracted quarter over quarter as the Kiwi rose against most currency peers. NZDUSD is slightly higher at 0.05%. Asian indices are moving generally lower as the HSBC China Manufacturing PMI shows another consecutive month of contraction and highlights the continued weakness experienced in Chinese industrial production. While Japan is still attempting to add stimulus, the half-life of the BoJ efforts to intervene in the yen with easing measures continues to shorten. The Nikkei is leading indices to the downside, crumbling -0.70% as the Australian ASX slides -0.47% and the Hang Seng declines -0.45%. AUDUSD has witnessed a marked drop of -0.44% in the overnight session.

The latest set of housing data from the U.S. are demonstrating that the dynamics of the housing market are slowly improving and shifting. Sales of existing homes rose to a two-year high as sales of foreclosure properties fell. Prices are also rebounding as the industry sets up for further progress. Even though Ben Bernanke is committed to purchasing mortgage-backed securities, he can decide to withdraw the program at anytime if employment and housing do rebound further. Equity indices were modestly higher with the Nasdaq adding 0.15% while the S&P 500 gained 0.12% and the Dow Jones increased 0.10%. The major mover in the energy sector was oil which fell from above the $96 handle to its present price of $91.76 per barrel following a major addition to U.S. stockpiles.
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