We have been seeing some good buying of currencies, particularly against the USD on dips today, with the Euro and Swissie tracking higher in New York. Sterling however remains a relative underperformer and is heavily weighed down on strong cross currency related demand in Eur/Gbp. The market could also be growing increasingly concerned with the ramp up in the BoE’s APS (Asset Purchase Scheme) last week. On the data front, the only release this morning has come out of Canada, with March new house prices coming in bang on expectations at -0.5%. This is the 6th consecutive monthly decline in the data series. The White House has released their revised forecasts for the economy, with a much rosier picture than some of the other mainstream projections. Also this morning, the Bundesbank said that Germany’s budget deficit could grow to some 6% of GDP by 2010, while the public debt ratio could rise to 80% of national income. The PBOC has been in the news, suggesting that China’s stimulus measures are helping to produce better than expected H1 results. Many traders will be focused in on Bernanke who is scheduled to speak later in the day at 23:30GMT on the bank stress test results. The S&P and DJIA are down by more than 1% on the day while commodities are also weaker. It is however worth noting the relative strength in the Nasdaq, which still sits in positive territory, though only marginally. The Yen crosses have also taken center stage today with many of the major cross rates putting in bearish outside days (see Eur/Jpy) to potentially foreshadow a more significant rise in risk aversion and negative equity sentiment.
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