Your forexlive.com ENewsletter

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• EC’s Olli Rehn: Tackling funding problems in Europe next challange
• EU’s Dijsselbloem: Must respect deposit guarantees
• AUD/USD: Have the floodgates opened?
• More from Moscovici: Germany has a tradition of rules but Europe also needs flexibility
• German fin min Schaeuble: Will get European banking union on it’s way quickly
• French Fin Min Moscovici: Transmission of monetary policy is not perfect
• EURUSD orders
• SNB forex reserves april: CHF 433.645 bln vs 438.3 bln prev
• European equity markets open higher
• French budget deficit march: y/y EUR -31.026 bln vs -27.1 bln prev
• French industrial output march:m/m -0.9% vs -0.3% exp
• French trade balance march: EUR- 4.7 bln vs -5.6 bln exp
• AUDUSD touching 1.0200 again
• Nikkei 225 closes up 3.55% at 14,180.24
• Swiss consumer sentiment Q2: -5 vs -6% prev
• Swiss unemployment april: unadjusted 3.1% vs 3.1% exp
• Rest of the data coming up in this session
• NAB passes on the full 0.25% cut to mortgage holders
• AUDUSD runs into buy orders after RBA cut rates
• RBA: Highlights of Glenn Stevens’ accompanying statement

EC’s Olli Rehn: Tackling funding problems in Europe next challange Posted: 07 May 2013 02:06 AM PDT Need European mechanism, fund for failed banks (thought they were already working on that one?)

EU’s Dijsselbloem: Must respect deposit guarantees Posted: 07 May 2013 02:01 AM PDT Mr Foot-in-mouth on the wires. Could be worth a few ticks Need clear claims hierachy in failed banks Need intergrated tools for failed banks Cannot spend and borrow way to recovery Private sector must bear costs for failed banks

AUD/USD: Have the floodgates opened? Posted: 07 May 2013 01:50 AM PDT The rate cut is banked and we’re below 1.0200 but still there’s no big rush to the exits. Even with a rates now at 2.75% it still presents a decent level to park your money. Bids that came in at 1.0180 are soaking up the selling for now while offers around 1.0200 halted any bounce. There is further support at 1.0165/70 and 1.0145/50. Under that little lot we have the March low at 1.0114. Certainly the converging triangle seems to be finally broken but we’ve been here before so time will tell. The pressure is now to the downside so selling rallies up towards previous support at 1.0220 and 1.0300 will be the plays for now.

More from Moscovici: Germany has a tradition of rules but Europe also needs flexibility Posted: 07 May 2013 01:41 AM PDT Another shot across the bows from the French fin min also says that the ECB has played a positive role in the eurozone crisis to calm makets and provide liquidity

German fin min Schaeuble: Will get European banking union on it’s way quickly Posted: 07 May 2013 01:19 AM PDT Must make best out of existing EU treaties for creation of banking union.

French Fin Min Moscovici: Transmission of monetary policy is not perfect Posted: 07 May 2013 01:03 AM PDT Banking union needs to improve credit flow to firms Hollande’s gov won’t slow down reforms after EU decision to give it more time on deficit goals. (Lucky that eh, after this mornings figures?) Public debt has to be reduced but at the right pace (how does two extra years sound?) Europe has to think about common budget capacity which could make common debt instruments possible in the medium term. Pierre Moscovici speaking in Berlin He’s speaking at a university along side Wolfgang Schaeuble to there may be more sound bites shortly. I was so excited by the headlines I promoted him to ECB member.

EURUSD orders Posted: 07 May 2013 12:27 AM PDT It’s been a real yawn lately on this pair and there doesn’t seem much on the horizon to shake things up. Let’s hope something changes soon. Currently 1.3075 Sellers  1.3100,1.3130,1.3150,1.3180,1.3200 Buyers 1.3050, 1.3030,1.3020, 1.3000,1.2980

SNB forex reserves april: CHF 433.645 bln vs 438.3 bln prev Posted: 07 May 2013 12:17 AM PDT Slightly lower figure from end-march but nothing that we should read much into

European equity markets open higher Posted: 07 May 2013 12:14 AM PDT FTSE +0.3% DAX +0.2% CAC40 +0.2% IBEX +0.4% FTMIB +0.4%

French budget deficit march: y/y EUR -31.026 bln vs -27.1 bln prev Posted: 07 May 2013 12:10 AM PDT An unwelcome though not necessarily unexpected rise in the deficit. EURUSD still at 1.3075

French industrial output march:m/m -0.9% vs -0.3% exp Posted: 07 May 2013 12:03 AM PDT +0.8% prev revised up from +0.7% Drop in March mainly due to lower production in the farming and transport sectors and a sharp fall in refining activity

French trade balance march: EUR- 4.7 bln vs -5.6 bln exp Posted: 06 May 2013 11:59 PM PDT EUR – 6 bln prev imports 40.9 bln vs 41.9 bln prev exports 36.21 bln vs 35.84 bln prev Out just now Improvement mainly due to deliveries of Airbus planes and a cruise liner EURUSD unchanged around 1.3074

AUDUSD touching 1.0200 again Posted: 06 May 2013 11:20 PM PDT Following my earlier post suggesting we’d see a battle down at 1.0180 I’m now hearing talk of Asian sovereign buyers down there providing the support Currently 1.0200

Nikkei 225 closes up 3.55% at 14,180.24 Posted: 06 May 2013 11:02 PM PDT + 486.20 points surge led by buying in japanese exporters first time above 14000 since June 2008

Swiss consumer sentiment Q2: -5 vs -6% prev Posted: 06 May 2013 10:49 PM PDT

Swiss unemployment april: unadjusted 3.1% vs 3.1% exp Posted: 06 May 2013 10:46 PM PDT 3.2% prev adj 3.1% vs 3.1% exp 3.1% prev USDCHF unchanged at  0.9368

Rest of the data coming up in this session Posted: 06 May 2013 10:12 PM PDT With the RBA announcement now done here’s what else is out there in data releases for this session. Times BST ( GMT + 1)

NAB passes on the full 0.25% cut to mortgage holders Posted: 06 May 2013 10:00 PM PDT NAB gets in first with the full pass through. Well done them.

AUDUSD runs into buy orders after RBA cut rates Posted: 06 May 2013 09:51 PM PDT AUDUSD is trying to chew its way through some buy orders around 1.0180-85 that we posted about previously. Next level of orders are lined up at 1.0140-50 with more at 1.0100-20. Should see a good battle here and all the way down if indeed traders want to take on that fight at this time and test the range lows of 1.0115 The RBA statement certainly leaves room for further cuts but that’s not entirely a surprise, neither was the cut today given recent domestic and Chinese data. Well done to Eamonn though for the correct call ! AUDUSD currently 1.0187 after 1.0178 lows from 1.0240 prior

RBA: Highlights of Glenn Stevens’ accompanying statement Posted: 06 May 2013 09:40 PM PDT The RBA cut by 0.25% to 2.75% From Glenn Stevens’ accompanying statement: The global economy is likely to record growth a little below trend this year, before picking up next year Growth in Australia was close to trend in 2012 overall, but was a bit below trend in the second half of the year, and this appears to have continued into 2013.  the peak in the level of resources sector investment likely to occur this year There has been a strengthening in consumption and a modest firming in dwelling investment, and prospects are for some increase in business investment outside the resources sector over the next year. Exports of raw materials are increasing as increased capacity comes on stream. inflation is consistent with the target and, if anything, a little lower than expected. The exchange rate, on the other hand, has been little changed at a historically high level over the past 18 months, which is unusual given the decline in export prices and interest rates during that time. Moreover, the demand for credit remains, at this point, relatively subdued. The Board has previously noted that the inflation outlook would afford scope to ease further, should that be necessary to support demand. At today’s meeting the Board decided to use some of that scope. It judged that a further decline in the cash rate was appropriate to encourage sustainable growth in the economy, consistent with achieving the inflation target. Note the last paragraph – the RBA decided to use some of that scope. There is still an easing bias going forward.

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