European Mid Morning Update
Releases from Europe:
| Forecast | Actual | |
| March | ||
| French CPI (MoM) | +0.6% | +0.8% |
| French CPI (YoY) | +3.0% | +3.2% |
French CPI at 3.2% YoY and oil climbing today to reach $112.48 indicates the inflationary pain will continue. With Italian inflation numbers today along with Germany's and the Euro-zone's later this week the ECB will watch with alarm. Already ECB officials have been stating that there is no room to lower interest rates this year - but with the credit markets in a rather delicate state they will be gritting their teeth and biting into pillows each night…
The following economic releases are due today:
February
U.K. DCLG House Prices (YoY) +7.4%
March
Italian CPI (MoM) +0.5%
Italian CPI (YoY) +3.3%
U.K. CPI (MoM) +0.6%
U.K. CPI (YoY) +2.6%
U.K. RPI (MoM) +0.5%
U.K. RPI (YoY) +3.9%
U.S. PPI (MoM) +0.7%
U.S. PPI (YoY) +6.1%
U.S. PPI ex food & energy (MoM) +0.2%
U.S. PPI ex food & energy (YoY) +2.7%
April
German ZEW Survey: Econ Sentiment - 30.0
German ZEW Survey: Current Situation +32.8
Euro-zone ZEW Survey: Econ Sentiment - 33.0
U.S. Empire Manufacturing - 18.0
U.S. NAHB Housing Market Index +20.0
It has been a strange old Asian session with what looks to be an impasse over what to do next with the Dollar. Some commentators are now so desperate for ideas they are looking at U.S. corporate earnings for inspiration.
Wachovia and GE disappointed and today is Citibank and Merrill's turn to announce Q1 results. Citi has sold off leveraged debt to remove it from the balance sheet and Deutsche is expected to do the same.
And in spite of a heavier release schedule today it is difficult to point to just what will provide the catalyst for any move. If anything it has to be the German and Euro-zone ZEW surveys along with the Empire manufacturing and NAHB housing market index from the States.
The market is bearish Dollars but has repeatedly hit barriers to the downside and unless they can muster up the ammunition to push the Dollar further down the risk s actually more on the upside for now. This should still be seen in the context of a correction only. Indeed, if there are any further losses in the Dollar it only looks like the Euro that will take the strain while new lows seem less likely in other currency pairs.