FX Highlights

• USD is trading sharply lower pressured by report that South Korea plans to reduce exposure to US bonds and equities, improving  risk sentiment as global equity markets hit new highs for 2009 and  rising crude prices, crude prices top $66 a barrel
• USD was also pressured by report that GM bankruptcy may be imminent, and by worries about financing of US debt  
• The trade awaits  this morning's release of US GDP to see if the report  fuels continuing optimism about the end of the global recession
• Japans April industrial production rises 5.2%, a 3.2% rise was expected, April CPI falls 0.1%, April unemployment rises to a five and a half year high of 5%, April household spending falls 0.9%, April housing starts fall 32.4% in a manufacturing PMI rises to 46.6, JPY higher
• UK May GFK consumer confidence unchanged at -27, UK house prices rise 1.2%, GBP higher
• Australia's April private sector credit rises 0.1%, AUD higher
• EU April M3 rises 4.9% compared to 5% last month, May inflation estimated at flat, EUR higher
• GM may file for bankruptcy June 1st, US mortgage delinquencies and foreclosures rose to a record high in Q1 2009, the delinquency rate rose to 9.12% from 7.88% and the foreclosure rate rose to 1.37%
• The Daily Telegraph carries a report about US bond yield rise defying efforts by the Fed to try push long-term rates lower
• Pimco's Gross says boom times for equity investors are over, and returns will be in the single digits
• Economist Roubini  of New York University says that US recession may be over by end of the year but he warns that another dip in the economy is possible next year, he expects the recession to last 24 months and the recovery to be U shaped, he warns of a possible double dip recession W shaped recovery  because of rising energy prices, rising public debt, increase in real interest rates rising inflation and expiration of a number of US tax cuts
• US equity markets set to open higher, European equities 2% higher, Nikkei closed 71 points higher

Upcoming Events

• US-Friday, Q1 GDP will be released expected at -5.5%, along with May Chicago PMI expected at 42 compared to  40.1 last month and May University of Michigan consumer sentiment expected at 68 compared to 65.1 last month
• CAN- Friday, Q1 current account will be release expected at $C -10.5 bln, compared to $C -7.49 bln last month

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090529_US_Morning_Notes.pdf		53 Kb