FX Highlights

• USD is trading mixed firming versus JPY supported by a sharp rise in US bond yields and Moody's affirmation of US AAA debt rating, JPY was  also pressured by optimism over the global economy and increased investor outflows, USD rally was limited by improving EU economic data as EU economic confidence rises to six month high, German unemployment falls and Swiss exports rise, GBP pressured by weak CBI data, commodity currencies supported by stable  crude prices
• US 10 year bond yields hit six month high, yield rise attributed to mortgage related selling and rising supply of bonds
• Moody affirms US AAA debt rating reducing fears about US funding of its deficit
• Japans  April retail sales rise 0.6%, JPY lower pressured by Japanese demand for  foreign assets, MOF flows data show  an increase in Japanese demand for foreign stocks and bonds
• EU May business climate falls 3% compared to 3.33% last month, May consumer sentiment improves to -30 from -31 last month and May economic sentiment improves to 69 from 67.2 last month, German unemployment falls to 8.2% from 8.3% last month, EUR higher
• Swiss trade surplus widened to 2.6 billion 161 million last month as exports rise 8.3%,CHF higher
• BOE's Blanchflower says you cannot assume the financial crisis is over and he doubts the UK economy will grow this year, UK May CBI retail sales fall to -17 from +3 last month, GBP lower
• Australia Q1 CAPEX spending falls 8.9%, a 7% decline was expected, AUD higher
• Geithner says US economy is entering early stages of recovery, FDIC's Bair sees some light at the end of the tunnel
• OPEC agrees to leave output levels unchanged
• US equity markets set to open higher, European equities 1 % lower, Nikkei closed 13 points higher

Upcoming Events

• US- Thursday, initial jobless claims for the week ending in 05/23 will be released expected at 620K compared to 631K last month, along with April durable goods expected at -0.8% and April new home sales expected at 360K compared to 356K last month

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